Rosneft responds to its inclusion on sanctions list

Russia’s Rosneft, indirect 13 per cent shareholder in Italian tyre maker Pirelli, has commented on the decision by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) to include it on the new sectoral sanctions list. The oil company was one of four energy sector companies added to the list on 16 July 2014; the sanctions were announced in response to unrest in Ukraine but were put in place before the crash of Malaysian Airlines MH17. Under the terms of the sanctions, US citizens can not undertake certain dealings with Rosneft and the other firms, and they will not be able to obtain medium or long-term lending from the US.

The following statement was released by Rosneft on 18 July.

In connection with Rosneft being included in the OFAC sectoral sanctions list, the Company is willing to state as follows:

Rosneft has no influence on either political or economic processes ongoing in Ukraine. For this reason, the above-mentioned sanctions are illegitimate and groundless.

Rosneft is a public company traded on Russian and international exchanges. Therefore, the sanctions inflict damage upon the company shareholders, including US citizens and residents. The Company is currently in the process of a legal review of the announced sanctions, and is consulting its international partners.

The Company will continue to work on the existing projects and agreements. Rosneft financial position is robust. Rosneft’s operating cash flows allow us to carry on with our current projects. The Company’s financial position also allows us to deliver on the key indicators of our strategy and dividend policy.

Rosneft possesses sufficient liquidity to service its debts and honor its contractual obligations. In June, for example, our Company and its shareholder, British BP, signed an oil products and oil supply agreement under which the advance payment amounted to about US$2 billion.