MOSCOW, September 12 (RIA Novosti), Alexander Mosesov – The expansion of EU sanctions against Russia will not lead to the collapse of the domestic oil industry, on the contrary, it may provide an impetus for the development of own technology, analysts polled by RIA Novosti said.
On Friday, the European Union banned its companies from providing services to their Russian partners for the exploration and production of the deep and Arctic oil and shale oil projects, well drilling and geological studies in particular, an official EU document states.
The EU also barred three major Russian oil companies – Rosneft, Transneft, Gazprom Neft – from seeking finance on European capital markets. Nevertheless, shares of Rosneft on Friday rose by 0.3 percent, Transneft, by 0.2 percent and Lukoil, by 0.2 percent.
EXTRACTION WILL GO ON
"One should not think that now, with the introduction of sanctions, we will be thrown back in time for years. Extraction of oil and gas in the country will be continued in the future as it has been before," Dmitry Baranov, an analyst at Finam Management, told RIA Novosti.
Private and institutional EU investors are now prohibited from giving loans to Russian oil companies for more than 30 days, purchasing and trading their new bonds, shares and related financial instruments with a term of more than 30 days.
EXTRACTION IN THE ARCTIC WILL BE COMPENSATED BY SIBERIA
The projects in the Arctic are very costly, complex and positive results there are not guaranteed, as evidenced by numerous failed projects, assistant professor at RANEPA University's economic sciences department Ivan Kapitonov told RIA Novosti.
"It is possible that the reserves of oil on Siberian land, which are much easier, more efficient and faster to develop than in the Arctic region, will help stabilize production, and there will be no reduction. Thus, for the next 10 to 15 years land oil reserves will make up for a temporary lack of technology and experience for extraction in the Arctic zone," Kapitonov said.
At the same time, experts do not rule out the possibility of the sanctions' real effects appearing within a few years. In addition, sanctions, combined with a number of other factors, could lead to a reduction of investment programs in Russian oil exploration and production.
"The effect may appear within a few years from the whole complex of the sanctions," Gregory Birg, co-director of the analytical department of Investkafe, told RIA Novosti.
In addition, the oil companies’ investment programs may be affected. "Geopolitical instability, economic uncertainty and restrictions on access to Western capital markets could lead to a reduction of investment in the Russian oil and gas exploration and production segment," Birg added.
Overall, the sanctions only slightly raise the future risks for Russian oil companies and do not pose a real threat in the meantime. And data from the Russian MICEX exchange proves it.