Impact of sanctions on business development of oil and gas corporations in Russia

Abstract

The Russian economy is currently subjected to unprecedented sanctions pressure from the United States and the Western countries. Supply of innovative equipment that is necessary for oil and gas production in the Arctic shelf and other hardtorecover fields to Russia is banned. International consortiums that were involved in large investment projects related to the extraction and transportation of oil from hard-to-recover fields terminated their cooperation with Russian oil and gas companies. However, the European and American companies are being replaced by Chinese corporations, which also have the necessary technologies and equipment for oil and gas production in hard-to-recover fields. It should also be noted that the European Union plans to reduce the volume of natural gas supplied from the Russian Federation and to build new terminals for the imported LNG, and has already abandoned the project to pump gas through the Nord Stream-2 pipeline. In response to these Western initiatives, the Russian authorities are likely to undertake a number of steps to re-route the natural gas supplies to China and build a gas pipeline to India. In this article, the author made an attempt to analyze from the scientific point of view and critically re-evaluate the issues of the sanctions impact on the development of business activities of oil and gas corporations in Russia.