[March 15, 2014]By Vladimir Soldatkin and Olesya
Astakhova
MOSCOW (Reuters) — A possible
ban on visas for the heads of Russia's two biggest energy firms, Rosneft and Gazprom, may hamper their international partnerships but
also harm their Western partners and push the two towards the East.
Rosneft, the world's largest listed oil company by production and
reserves, and Gazprom, the top natural gas producer, rely heavily on
overseas markets for their sales. Their chief executives travel
abroad frequently to promote their businesses and strike deals with
international partners.
Germany's Bild newspaper reported on Friday that visa bans
threatened by the European Union and the United States in
retaliation for Russia's seizure of Ukraine's Crimea region would
include Gazprom head Alexei Miller and Rosneft head Igor Sechin.
European officials earlier said that the EU list includes 120 to 130
names of senior Russian officials who could be subjected to travel
bans and asset freezes.
Both Sechin and Miller worked together with Russian President
Vladimir Putin in the 1990s and are the members of what is seen as
Putin's inner circle.
"This is stupid, petty and obvious sabotage of themselves most of
all," Rosneft spokesman Mikhail Leontyev said, when asked about the
threat of EU visa sanctions. "I think this would primarily affect
Rosneft's business partners in the West in an extraordinary way."
Miller frequently travels to Europe and on Thursday was in Berlin to
celebrate an anniversary of cooperation with German utility E.ON.
Sechin also travels frequently. Sources at Rosneft said he would
embark on a long tour to Asia next week with stops in India,
Vietnam, South Korea and Japan.
Gazprom declined to comment, saying it would wait for an official
statement, rather than rely on media speculation.
GLOBAL GIANTS
Disruptions in energy supplies from Russia as a result of a visa ban
or other sanctions could lead to a jump in oil and gas prices, which
could damage the fragile recovery of the European economy.
Gazprom last year accounted for more than 15 percent of global gas
production and reserves and earned export revenues of $163 billion.
It controls a third of Europe's gas market. Russia also supplies
Europe with a quarter of its oil, mainly from Rosneft.
"European business is closely tied up with Rosneft and Gazprom,"
said Sergei Vakhrameyev, an analyst with Ankorinvest brokerage in
Moscow. "If (the visa ban report) is true, it would hamper
partnerships between the companies."
Rosneft has agreements with the U.S.'s Exxon Mobil, Italy's ENI and
Norway's Statoil on exploring oil and gas in Russia's Arctic. It
holds a 50 percent stake in four Ruhr Oel refineries in Germany and
21 percent in Italian refinery Saras. Last December, it agreed to
buy much of Morgan Stanley's physical oil-trading business.
"Deals are in danger of being scrapped (in the case of
sanctions)," Vakhrameyev said.
Western companies with significant interests in Russian energy stand
to lose.
The UK's BP owns 19.75 percent of Rosneft. Shell is part of the
Gazprom-led Sakhalin-2 project in Russia's Pacific, which includes
Russia's sole liquefied natural gas export plant.
Western banks hold most of the $90 billion in combined debts of
Rosneft and Gazprom.
ASIA PUSH
Disintegrating relations with the West could push Russia's energy
giants further to the East and encourage them to do more business
with China, which earlier this year overtook Germany as Russia's
single largest oil buyer.
"It impedes (Rosneft/Gazprom's) ability to do some deals and is
annoying and uncomfortable, but it isn't crippling," said Bruce
Bower, an analyst at Moscow-based hedge fund Verno, about the threat
of visa sanctions.
He added that the move would accelerate Russia's tilt toward the Far
East, which started with the building of pipelines to China.
Rosneft has been increasing oil exports to China and targets
delivery of nearly 1 million barrels per day there, up from around
300,000 bpd last year. The rise in oil exports to Asia has led to
cuts in oil exports to Europe.
