Norway's Statoil Cherishes Teamwork With Russia More Than Sanctions Commitment

Despite Oslo's dutiful support of the US-propelled sanctions against Russia, Norwegian oil giant Statoil was found to have cherished its relations with Russian companies more than its government's political ambitions.

Whereas Norway was busy joining the comprehensive sanctions against Russia, Statoil established a joint-venture company with its long-standing Russian partner Rosneft. Every six months, Norway has extended its anti-Russian sanctions, while the cooperation between the two oil companies gradually expanded.

In 2016, Statoil drilled two oil wells in the Sea of Okhotsk in Russia's Far East. According to Norwegian daily Aftenposten, Statoil is also poised to create another joint venture with Rosneft in West Siberia, provided that the recent findings are commercially viable.

"There has been no breach of the sanctions conditions," Statoil CIO Erik Haaland told Aftenposten, admitting that the company had "regular dialogue" with Rosneft representatives on the level of cooperation. Haaland was also reluctant to disclose how much money it has spent on confidence-building efforts in Russia during the sanctions years.

Despite the fact that Norwegian Foreign Minister Børge Brende is a stalwart defender of the sanctions policy, the Foreign Ministry itself does not seem to mind the partnership.

"We have always prioritized cooperation in areas of mutual interest. There are no hurdles for the business cooperation with Russia as long as it is in line with the restrictive measures," Norwegian Foreign Ministry spokesman Frode Overland Andersen said.

Needless to say, there are other opinions. According to Professor Iver B. Neumann from the London School of Economics and Political Science, Norwegian Institute of International Affairs and the Norwegian University of Life Sciences, such cooperation sends a double signal to Russia and is fraught with political consequences, since Statoil was "indirectly playing into Russia's hand" by supporting a company led by "Vladimir Putin's confidant," Igor Sechin, who happens to be on the US and EU sanctions list.

"This is extremely cynical [of the Russians], as they can use Statoil as a tool for breaking what is the sanctions spirit," Iver B. Neumann argued, calling Rosneft's "the Kremlin's money machine."

Cooperation between Statoil and Rosneft on exploration in Norway's continental shelf and in the Russian part of the Barents Sea was been put on ice due to the sanctions, which especially targeted deep water drilling. Given the fact that Norway is among the countries that were hardest hit by the West's sanctions policy against Russia, it is only natural that Statoil, known for its enduring partnership with its Russian counterparts, has tried to possibly cut the losses. The Arctic's oil and gas resources are estimated to constitute about 35 percent of the world's future reserves. Norwegian and Russian companies belong to mutually dependent for investors and technology.

At present, there is considerable debate within the EU on the continuation of the sanctions pressure, which expires in July 2017. According to US President Donald Trump's councilor Kelly Anne Conway, the US leader was considering whether the sanctions should be abolished, which could potentially set an example for the European Union to follow.

Rosneft is considered one of the world's largest oil companies, whereas its CEO Igor Sechin is considered one of Russia's most powerful men.

 

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