Rosneft Will Be Able to Keep Drilling in The Arctic Thanks to Norway

While sanctions will prohibit Rosneft from gaining access from certain technologies needed for deep sea drilling from the E.U. and U.S., a Norwegian company may be able to help. 

This article is from the archive of our partner .

Rosneft and ExxonMobil have a way to work around recently implemented United States and European Union sanctions in order to continue their Arctic drilling project. Earlier this week, sanctions were targeted at Russia's financing, as well as their exporting, specifically in regards to certain technologies. Some of these technologies would impact the oil sector, even though the oil sector was not directly sanctioned. 

The two oil giants will be working with a Norwegian drill rig owner in order to gain access to the technologies that will be affected by sanctions. Specifically, the E.U. sanctions target certain technologies needed for deep-sea drilling. However, Rosneft signed a deal to lease six deep-sea drilling rigs on July 29 — before the sanctions were finalized, so the leases are still valid. These six rigs are owned by the North Atlantic Drilling unit of Seadrill Ltd.

Seadrill works in a large variety of countries. It is owned by Norwegian billionaire John Fredriksen. While the company is headquartered in London, it is incorporated in Bermuda. The North Atlantic Drilling unit is managed in Norway. Norway is not a member of the E.U.

Rune Magnus Lundetrae, Seadrill’s chief financial officer, told Bloomberg, "We understand that the sanctions will be possibly valid from Friday, August 1, and apply to future contracts. And these contracts were signed July 29." 

Igor Sechin, Rosneft's CEO, also noted the importance of this deal with Seadrill, "Entering into long-term offshore drilling agreements will allow Rosneft to ensure implementation of exploration and development of its harsh environment offshore license areas." 

While this deal may seem perfectly timed, literally hours before the E.U. sanctions take effect, Alf Ragnar Lovdal, Chief Executive Officer of North Atlantic, has said the contract for these six rigs is "is in line with the timetable agreed earlier this year." The deal with Seadrill allows Rosneft to use the six rigs until 2022

When reached for a comment, a spokesperson for Exxon Mobil told The Wire "We don’t have any comment on media reports."

This article is from the archive of our partner The Wire.