USA: THE TINIEST SANCTIONS

The US government has imposed sanctions against the Crimean subsidiary of Ukraine's national gas company, which was seized by the region's parliament in the run-up to its annexation by Russia.

The Department of Commerce said on Friday afternoon that Chernomorneftegaz – also known as Chornomornaftogaz – had been added to the list of entities facing trade restrictions, saying the company's assets were "now being overseen by Russian government interests".

The sanctions are likely to make it impossible for US companies to enter joint ventures with Chernomorneftegaz to explore areas in the Black Sea that are believed to hold significant oil and gas reserves.

However, it had already been clear since Russia's move into Crimea that the disputed status of those areas would make operating there very difficult for western companies.

ExxonMobil and Royal Dutch Shell had been pursuing an offshore joint venture in the Black Sea with companies other than Chernomorneftegaz before the political turmoil in Ukraine led to the downfall of its government. Their plans were put on hold earlier this year.

The sanctions will also make it difficult for US oil services companies to supply Chernomorneftegaz. The rules impose a licence requirement on anyone seeking to export, re-export or transfer items to the company, "with the presumption of denial".

Eric Hirschhorn, US undersecretary of commerce, said the latest sanctions would send "a strong message of the United States government's condemnation of Russia's incursion into Ukraine and expropriation of Ukrainian assets".

A recent note by IHS, the research group, suggested that last year Chernomorneftegaz provided 7.9 per cent of Ukraine's gas production and 2.4 per cent of its oil.

However, it added that the company's offshore operations "are concentrated primarily in the northwestern part of the Black Sea shelf, an area with many highly prospective structures, where eight gas and gas condensate fields have been already discovered".

FT.COM.