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Experts say Trump may lift anti-Russian sanctions to meet US oil lobby’s interests

November 09, 2016, 17:58 UTC+3 MOSCOW

Analysts agree that no quick decisions on the sanctions regime and no active return of US oil and gas companies to Russia should be expected

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© AP Photo/Martha Irvine

MOSCOW, November 9. /TASS/. Republican Donald Trump who has emerged victorious in the US presidential elections may lift the anti-Russian sanctions as he is known to promote the interests of US oil and gas companies, including ExxonMobil, experts polled by TASS said on Wednesday.

The experts have made cautious assumptions on the possibility of the sanctions cancellation but do not rule out this probability in the long-term perspective.

"A positive component can be in cooperation between the United States and Russia. It is quite possible that Trump will ease the sanctions or cancel them all together, at least for the oil and gas sector. He is perceived as a person who is promoting the interests of US oil producers, including ExxonMobil," leading expert of the National Energy Security Fund Igor Yushkov said.

His opinion is shared by Sberbank CIB analyst Valery Nesterov. "In the immediate future, they [the sanctions] will hardly be lifted. In the longer perspective, the chances can be greater than if Hillary Clinton had become the president. Trump is an economist and businessman. He understands the significance of developing trade and economic relations and cooperation with Russia in the energy sector. Trump is more sensitive to the needs of the oil lobby led by ExxonMobil, which stands for returning to Russia and continuing the work that was started, including on the Arctic shelf to extract tight oil," Nesterov said.

ExxonMobil CEO Rex Tillerson has stated on many occasions that the company is interested in resuming work of the joint venture with Russia’s state-owned oil giant Rosneft after the sanctions are lifted.

ExxonMobil had to curtail 9 out of 10 joint projects with Rosneft over the anti-Russian sanctions, including exploration and potential extraction on the shelf of the Black Sea, in the Arctic and West Siberia. Initially, the company estimated its losses from the sanctions in the amount of up to $1 billion.

There should be no hurry

In the opinion of Finam analyst Alexei Kalachyov, Trump is not a very predictable politician and, therefore, the sanctions can be expected to be both eased and tightened.

"Moreover, the election rhetoric of a candidate far from always coincides with the elected president’s subsequent actions. That is why, anything can be expected: both the easing and the tightening of the US administration’s position on Russia. All the more so as it is usually counterbalanced by the other branches of power," the expert said.

Analysts agree that no quick decisions on the sanctions regime and no active return of US oil and gas companies to Russia should be expected.

The sanctions regime is unlikely to be lifted soon due to lengthy organizational procedures and the absence of Trump’s unlimited possibilities in the post of the US president.

US oil producers are also unlikely to actively return to Russia over low world oil prices.

"In the event that the sanctions are cancelled, Rosneft and ExxonMobil may resume relations on shelf projects, including in the Kara Sea. It is true, though, that no active actions should be expected in this regard due to the low oil price. I doubt that in this situation the companies will start drilling the second well at the Pobeda deposit in 2016-2017 at an oil price of $45-50 per barrel. Possibly, they will delay it until 2018," Yushkov said, noting that the most realistic option in this scenario could be cooperation for developing the Bazhenov oil formation in Western Siberia.

Otkritie Capital analyst Artyom Konchin said he believed that the Arctic shelf projects were not strong enough economically at present due to the current oil prices.

Oil sanctions

In July 2014, the United States imposed sanctions against Rosneft and also the regime of export licensing of goods intended for some oil projects in Russia related to deep-water extraction on the shelf and in the Arctic (the restrictions applied to future projects).

At the same time, the European Union imposed the regime of the licensing of some goods and technologies exported to Russia for the oil industry and in August these restrictions were followed by the US sanctions concerning a ban on access to critical technologies in the oil and gas sector.

Besides, in September that year the United States and the European Union imposed a special package of sanctions against major Russian oil and gas companies.

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