The managing partner of ART DE LEX, Dmitry Magonya, commented on consequences of Canadian sanctions against Rosneft

On 18 February 2014, Canada expanded its sanctions against 17 companies and 37 citizens of Russia and Ukraine, and the Russian company, Rosneft, is on the list.

The first Canadian sanctions against Russia appeared in March 2014, and December 2014 marked the first time for sectoral sanctions that prohibit the export of equipment necessary for exploitation in the Russian Arctic.

Rosneft currently is working on a project in Canada. In August 2012, the company bought 30 percent of ExxonMobil subsoils from the total of 108 Cardium subsoils in Alberta Province. According to Rosneft, the transaction cost RUB 2 billion. In 2013, Rosneft built and put into operation 31 wells, and the same year, it produced about 39,000 tons of oil and 12.9 billion of cubic meters of gas.

Cardium is a second wealthiest oil subsoil in Canada, after the Williston Basin zone. For Rosneft, the project also is important because it helps the firm understand Canadian production techniques, experience it will use for its production in Russia, especially in the Achimovsk, Bazhenov, and Tumen subsoils in Western Siberia.

The press secretary of Rosneft, Mikhail Leontiev, told the Russian news service that the Canadian oil industry “is dying” and that the Canadian actions are “sanctions against a dead man. I do not mean Rosneft; I mean Canadian oil production.” According to BP, in 2013, Canada produced about 192 billion tons of crude oil, which is in 6 percent more than in 2012. 

“The consequences may vary for the Cardium project,” stated the managing partner of ART DE LEX, Dmitry Magonya. “On the one hand, the sanctions are not retroactive, and the project launched in 2012, long before the sanctions. The project should not fall under the sanctions. On the other hand, in every case, sanctions have weak legal certainty, since they depend on the political situation. In any case, Cardium is ‘at risk.’”