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Shale work in Ukraine on hold, Shell says

Operations in shale acreage in eastern Ukraine can no longer continue as planned, the chief executive officer at Royal Dutch Shell said. Shell released strong earnings for second quarter 2014. In a conference call to explain the report, CEO Ben van Beurden said some of the company’s operations in Europe may be influenced by ongoing crises in Ukraine. The European community is trying to diversify an energy sector influenced heavily by Russia. The European market gets about a quarter of its gas needs met by Russia, though most of that runs through the Soviet-era gas transit network in Ukraine. Russia’s role in conflict in eastern Ukraine prompted Western powers to issue harsh sanctions against the Kremlin. Van Beurden said his company wasn’t as vulnerable to those sanctions as other companies, but said the sanctions pressure had changed the game in terms of an investment perspective. In Ukraine itself, the […]

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Energy Companies Rethinking Russia After New Round of Sanctions

The downing of Malaysia Airlines Flight 17 over eastern Ukraine — and the tougher round of sanctions against Russia that followed — is prompting some big multinational energy companies to take a fresh look at the ramifications of the crisis. For months, American and European energy players have continued to sign deals with Russia, maintaining a posture that business was proceeding as usual. But top industry executives are now starting to acknowledge that the escalating tensions could sharply hurt Western oil and gas giants with major investments in Russia, as well as the service companies that are key technology suppliers. “We are in the heat of a very emotional stage,” Robert W. Dudley, BP’s chief executive, told reporters on Tuesday. The company warned that further economic sanctions could harm BP’s income, production and reputation. France’s oil giant, Total, which had been among the most committed to Russia, […]

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Merkel rethink on sanctions reflects loss of trust in Putin

epaselect epa04241887 German Chancellor Angela Merkel (L) meets with Russian President Vladimir Putin (R) in Deauville, Normandy, France, 06 June 2014. Merkel met with Putin for bilateral talks before the ceremony to mark the 70th anniversary of D-Day landing of Allied forces in France. D-Day marked the beginning of the advance into Europe which led to the defeat of Nazi Germany. EPA/MICHAEL KAPPELER Hours after Malaysia Airlines flight MH17 crashed in a field in eastern Ukraine, killing 298 people and igniting a geopolitical crisis, Angela Merkel reacted to the news with the same quality that has characterised much of her political life: caution. It was “too early” to discuss new sanctions against Moscow, the German chancellor said, even as claims were already surfacing that Russia-backed separatists had shot down the plane. More On this story On this topic IN Europe “These events have once again shown us that what […]

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U.S. and European companies are girding for the possible impact of

U.S. and European companies are girding for the possible impact of tougher international sanctions against Moscow , with auto makers and energy giants moving to limit the Russian risks to their businesses. French oil company Total SA said Wednesday that it has stopped increasing its stake in Russia’s second-largest natural-gas producer, OAO Novatek , and will discuss the sanctions with its partners in Russian projects. A factory of Russian titanium-manufacturing company VSMPO-Avisma. Reuters "Russia is a great oil-and-gas country and we’ll have to wait and see the nature of these new sanctions first," Total Chief Financial Officer Patrick de la Chevardière told reporters during a conference call. The European Union and the U.S. on Tuesday adopted sweeping economic sanctions against Russia, targeting for the first time sectors including Russia’s state-controlled banks and oil industry. The stronger sanctions have been driven by public outrage and Kremlin recalcitrance in the aftermath […]

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EU Aims at Russian Banks, Technology in Widest Sanctions Yet

The European Union curbed Russia’s access to bank financing and advanced technology in its widest-ranging sanctions yet over President Vladimir Putin ’s backing of the rebellion in eastern Ukraine. EU governments agreed today in Brussels to bar Russian state-owned banks from selling shares or bonds in Europe and restricted the export of equipment to modernize the oil industry, a key prop for Russia’s economy, two EU officials told reporters. New contracts to sell arms to Russia and the export of machinery, electronics and other civilian products with military uses will also be banned. “The political implications of the escalation in tensions are likely to cast a further chill over relations between Russia and the West,” Citigroup Inc. analysts including Eric Lee and Tina Fordham said in a note to clients before the EU decision. “Economic costs are starting to bite, but it could be a while before the economic […]

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EU and U.S. announce new sanctions on Russia over Ukraine

The European Union and the United States on Tuesday announced further sanctions against Russia, targeting its energy, banking and defense sectors in the strongest international action yet over Moscow’s support for rebels in eastern Ukraine. The measures mark the start of a new phase in the biggest confrontation between Moscow and the West since the Cold War, which worsened dramatically after the downing of Malaysian flight MH17 over rebel-held territory on July 17 by what Western countries say was a Russian-supplied missile. "If Russia continues on this current path, the costs on Russia will continue to grow," President Barack Obama said in Washington. "Russia’s actions in Ukraine and the sanctions that we’ve already imposed have made a weak Russian economy even weaker," he said. In Brussels, diplomats said ambassadors from the 28-member European bloc agreed to restrictions on trade of equipment for the oil and defense […]

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Siemens to BP Prepare for Downward Russia Business Spiral

BP Plc , Siemens AG and Renault SA are among European companies preparing for a downward turn in their Russian business following the European Union’s decision to impose its widest-ranging sanctions yet over President Vladimir Putin ’s involvement in eastern Ukraine. EU leaders announced plans yesterday to restrict the export to Russia of equipment to modernize the oil industry and forbid the sale of machinery, electronics and other civilian products with potential military uses. New arms contracts with Russia are also not allowed. The sanctions will have a direct impact on companies like Siemens, which may no longer be able to sell oil equipment to Russia, and an indirect effect on many others like Renault, which expects the country’s auto market to contract more than 10 percent in 2014 as consumers hold back purchases. BP, owner of 20 percent of state-backed OAO Rosneft , yesterday warned of risks to […]

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Russia’s central bank supports sanctions targets

Russia’s central bank promised to support financial institutions hit by U.S. sanctions as stocks took a tumble in Moscow on Wednesday. In an online statement, the bank promised to "take adequate measures" to support targeted institutions. Russia’s state-owned VTB bank – Russia’s second-largest – was down 0.5 percent on Wednesday morning. Other major banks that were left unscathed by sanctions – such as the country’s largest, Sberbank – were trading higher. Russia’s MICEX benchmark index added 2.3 percent from its previous closing. U.S. officials said Tuesday that roughly 30 percent of Russia’s banking sector assets are now constrained by sanctions. The move comes after Malaysia Airlines Flight 17 was shot down over eastern Ukraine. Western officials accuse pro-Russian separatists of bringing down the plane with a missile supplied by Moscow. The West also halted future sales to lucrative Russian economic sectors, with the U.S. announcing plans […]

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Russia's central bank supports sanctions targets

Russia’s central bank promised to support financial institutions hit by U.S. sanctions as stocks took a tumble in Moscow on Wednesday. In an online statement, the bank promised to "take adequate measures" to support targeted institutions. Russia’s state-owned VTB bank – Russia’s second-largest – was down 0.5 percent on Wednesday morning. Other major banks that were left unscathed by sanctions – such as the country’s largest, Sberbank – were trading higher. Russia’s MICEX benchmark index added 2.3 percent from its previous closing. U.S. officials said Tuesday that roughly 30 percent of Russia’s banking sector assets are now constrained by sanctions. The move comes after Malaysia Airlines Flight 17 was shot down over eastern Ukraine. Western officials accuse pro-Russian separatists of bringing down the plane with a missile supplied by Moscow. The West also halted future sales to lucrative Russian economic sectors, with the U.S. announcing plans […]

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BP frets over ‘strategic objectives in Russia’

British energy company BP said Tuesday its second quarter profits soared, but any additional sanctions could impact "strategic objectives in Russia." BP reported second quarter replacement cost profits, a measure that eliminates oil price volatility, at $3.2 billion, up 34 percent from the same period in 2013. BP Chief Executive Bob Dudley said in a statement cash flow during the second quarter was "robust." The company attributed its strong second quarter to upstream operations in the Gulf of Mexico and overhauls at its refinery in Whiting, Indiana. Elsewhere, the company said sanctions on the Russian energy sector, particularly oil company Rosneft, could impact business operations in Russia. "Any future erosion of our relationship with Rosneft, or the impact of further economic sanctions, could adversely impact our business and strategic objectives in Russia, the level of our income, production and reserves, our investment in Rosneft and our reputation," the company […]

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