Congressmembers on both sides of the political aisle have called on the United States and its allies in the Group of Seven (G7) to expand sanctions that currently target the Russian oil trade to also include the transfer of oil and gas technology, in an effort to curtail the Kremlin’s war coffers.
In a letter to the treasury and state department chiefs, 52 legislators raised alarm over alleged contracts, technology deployment including via third-country exports, tech patents and hiring undertaken by oil and gas technology giant SLB in Russia after the invasion of Ukraine February 2022. The revelations were contained in reports by Financial Times and fossil fuel watchdog Global Witness last August. The reports cited official documents including filings.
“In concert with our allies in the G7, we must tighten oil sanctions to prevent the billions in revenue currently flowing into the Kremlin’s budget”, stated the letter.
Current sanctions in the U.S. over the war prohibit the import of Russian crude oil, refined petroleum products, liquefied natural gas, coal and coal products. The March 2022 executive order containing these prohibitions also bans “new investment in the energy sector in the Russian Federation by a United States person, wherever located”.
Meanwhile the G7 — which includes the European Union — and Australia have imposed price caps against Russian oil since December 2022 in response to the invasion.
According to the U.S. Treasury, however, Washington has no “comprehensive sanctions” against the Russian energy sector, as stated in a FAQ on its website.
Last May, Assistant Secretary of State Geoffrey Pyatt told Reuters that SLB had not violated U.S. sanctions in the company’s dealings with Russia after the invasion. “I have had conversations with the CEO of that company… I think there is a clear understanding within SLB in terms of where the guard rails are on the sanctions policy”, Pyatt said.
In April 2023 Ukraine’s National Agency on Corruption Prevention added SLB to its “list of international war sponsors” accusing it of expanding its presence in Russia even after the invasion.
In its latest update about its Russian activity, published August 2024 after the revelations by Global Witness and Financial Times, SLB said it was not making any new investment or deploying new technology in Russia.
In their letter to Secretary of State Antony Blinken and Secretary of the Treasury Janet Yellen, the members of the U.S. Lower House said, “We are cognizant of the arguments often cited that Russian oil provides a critical and irreplaceable segment of the global oil supply”.
“However, allowing Russia to benefit from Western technology and expertise only increases the resiliency of their oil and gas sector against Western sanctions and prolongs its ability to finance its illegal offensive”, they said. “Permitting Western investment in the oil and gas sector strengthens Russia’s wartime economy and its military strength”.
“If current sanctions permit SLB or other American companies to acquire equipment from third countries such as China and India, and then import that equipment into Russia, what does this sanctions regime accomplish other than encouraging such companies to purchase their equipment abroad, rather than in America, while still conducting business in Russia?” the letter asked.
The lawmakers demanded a list of all transactions approved for exemption from U.S. sanctions.
“It is alarming that SLB, an American company, is still free to help Russia produce and export its oil to fund the war chest of an authoritarian regime”, they said.
Democrat Representative Lloyd Doggett, among the letter’s signatories, said in a statement, “By permitting his [Putin’s oil] exports and permitting continued American company investments in Russia, Americans, and our European allies, are essentially funding both sides of this war”.
“Oil is the lifeblood of the Russian war economy, which is why the West must stand united in tightening and enforcing oil sanctions”, said signatory Jake Auchincloss, also a Democrat lawmaker. “That begins by holding SLB and its collaborators accountable for evading allied sanctions, profiteering from pain, and fueling Putin’s ability to wage war”.
In its August statement, SLB said it condemns the invasion but that it had not made an “accelerated exit” from Russia as doing so “would have exposed our people, our technology and our business to significant risk”.
It said its presence in Russia continued to decrease in 2024. “Russia was less than 5 percent of our revenue in 2023, and we anticipate full-year 2024 revenue from Russia to be lower than 2023”, SLB said.
It admitted making staff recruitments after the invasion but said, “All hiring during 2023 and 2024 was to replace headcount reductions due to attrition and the seasonal slow-down and was not due to new investment in Russia”.
SLB and the state and treasury departments have yet to respond to Rigzone’s requests for comment.
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