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2014-07-25 10:19:00

RUSSIAN OIL & GAS: NO SANCTIONS

RUSSIAN OIL & GAS: NO SANCTIONS

The European Union should target energy sanctions against Moscow on the technology needed to unlock arctic resources, but it shouldn't restrict oil or gas imports from Russia, the bloc's energy chief said on Wednesday.

"I've always said that energy deliveries, such as oil, gas, coal and uranium, from Russia into European markets...shouldn't be put on a sanctions list," Günther Oettinger told a news conference. "But the Russians see a great potential for offshore oil and gas in the Arctic, which they could unlock with technology, software and hardware...which its own industry can't produce."

EU authorities are drawing up fresh options for sanctions that the 28- nation bloc could impose on Russia if the situation in Ukraine continues to deteriorate. On Tuesday, EU foreign ministers said they could adopt trade restrictions on defense, energy and high-technology items, as well as limiting Russia's access to credit markets, they said.

The issue of sanctions against the Kremlin has taken on a greater urgency since the shooting down last week of Malaysia Airlines flight 17 over eastern Ukraine by suspected pro-Russian separatists using a Russian-made antiaircraft system. Well more than half the dead passengers on the downed aircraft were Dutch nationals. The U.S. and Ukraine tie Russia and the rebels to the downing, while Moscow and the separatists have denied shooting down the plane.

Mr. Oettinger said exports of energy technology "should be put on a sanctions list to show our Russian partners that if they don't contribute towards peace in eastern Ukraine" then they won't receive western technology to help boost their economy.

Since the crisis in Ukraine escalated earlier this year, the EU's executive arm—the European Commission—has executed numerous steps to shrink Russia's energy footprint in Europe. But member states have been tentative about adopting broad energy sanctions because many of those nations are dependent upon imports of Russian gas.

EU governments are, however, expected to add additional Russian individuals and companies to their sanctions list later this week. The commission has little influence over member states' sanctions decisions.

Last week, the EU postponed a decision on granting Russia full access to a major pipeline, known as OPAL, frustrating Moscow's hopes of increasing gas exports to the EU. It has also put on ice talks on South Stream, Russia's big pipeline project to bring gas to Southern Europe, bypassing Ukraine.

Russian energy giant Gazprom  halted its gas deliveries to Ukraine in June, saying it was owed billions in unpaid debts. Ukraine is the main transit country for Russian gas supplies to the EU, which relies on Russia for over a third of its gas imports.

wsj.com

Tags: RUSSIA, OIL, GAS, SANCTIONS, EU

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