According to the Financial Times, Russian oil and gas players like Rosneft (OTCMKTS: OJSCY) and Novatek OAO (OTCMKTS: NOVKY) should not have any trouble using their cash flows to repay and/or refinance loans. What could prove to be a real headache are the EU and US restrictions on the export of technologies used in Arctic, deepwater or shale oil exploration because production from the ageing workhorses of the country’s oil industry – the vast conventional oilfields of western Siberia – is dropping off sharply.
While Russia does not need help producing conventional oil (something its been doing for more than 100 years), Arctic, deepwater or shale oil exploration requires access to western technology, capital and expertise. With oil sales accounting for 44% of Russian budget revenues, the future stakes are high.
To read the whole article, US sanctions not mere ‘trifles’ for Russia’s oil industry, go to the website of the Financial Times.
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