Sanctions miss Russian oil

25 Sep 2014
Calgary Herald
Sanctions miss Russian oil
So far, at least, Canada hasn’t targeted sector
NEWYORK— For all its much-touted toughness in imposing economic sanctions against Russia, Canada has been significantly more timid against one particular target: the oil industry.
A database of sanctions compiled by The Canadian Press suggests Canada has been almost three times less likely to penalize Russian oil companies than the United States.
The Harper government has imposed economic penalties against five Russian oil companies, compared to 13 firms targeted in that same sector by the U.S.
That’s despite the fact that in its vast array of more than 175 sanctions targets, Canada has been as tough as the U.S. — if not tougher — on other segments of Russian society, including private citizens, the defence industry, mining, and financial-services companies.
The oil and gas sector is a clear statistical exception, representing about 13.8 per cent of Canadian sanctions against companies imposed during the Ukrainian crisis.
By way of comparison, the proportion is about 29.5 per cent in the U.S. and 20 per cent in the European Union.
Also, four of Russia’s largest oil companies and its dominant pipeline company have faced sanctions in either the U.S., Europe, or both: Rosneft, Lukoil, Surgutneftgas, Gazprom and the state-run pipeline monopoly Transneft.
Not one of them has faced such measures from Canada.
In an interview, Canada’s industry minister said he hasn’t heard any complaints from the opposition or regular citizens about the approach to sanctions.
“There has been none of that,” Industry Minister James Moore said. “There’s been a unified Canadian understanding that the position of Stephen Harper is the correct one, morally.
It won’t be without its frustrations for some people who have had long business ties with Russia — but certainly some things are more important.”
But when asked whether the government might follow the U.S. with sanctions against influential Vladimir Putin ally Igor Sechin and Rosneft, the No. 1 Russian oil company that has Sechin as its chairman, Moore said: “I don’t have any comment on that.”
The Canadian government is on the international stage this week promoting its robust response to Russia’s intervention in Ukraine, as Prime Minister Stephen Harper makes it one of the themes of his address to the United Nations General Assembly.
Canada has, in fact, imposed more sanctions overall than either the U.S. or Europe. The Canadian Press compiled a database that shows Canada with 175, not including several against more amorphous entities like “the Federal State of Novorossiya,” which is also on the Canadian list.
As for why Russian oil is so scarce on that same list, one academic who has researched the geopolitical reach of Russia’s oil industry says there might be an extremely simple explanation: human oversight.
David Detomasi of Queen’s University says Canadian interests there are relatively minor. They’re mostly limited to providing logistical help with extraction — and don’t extend to actual drilling or ownership stakes, which American oil companies actually do have there. Exxon Mobil has just had to pause drilling in Russia’s Arctic because of American sanctions.
“Since we don’t have a huge amount of interests in Russian oil,” Detomasi said, “it could simply be something that hasn’t been attended to yet.”

About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on September 25, 2014, in Uncategorized and tagged . Bookmark the permalink. Leave a comment.

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