Gazprom Sakhalin Shelf Project to Be Unaffected by US Sanctions

Russian Energy Minister Alexander Novak said that new sanctions will not affect Gazprom in the issue of the development of the Yuzhno-Kirinskoye offshore field, located some 20 miles to the northeast of the Sakhalin Island in Russia’s Far East.

VLADIVOSTOK (Sputnik) — The US sanctions against Russian energy giant Gazprom’s project in a field on the Sakhalin shelf will not affect its development, Russian Energy Minister Alexander Novak said Friday.

The Yuzhno-Kirinskoye offshore field, located some 20 miles to the northeast of the Sakhalin Island in Russia’s Far East, was added last month to a US Entity List of sanctioned Russian assets, according to an entry in the US Federal Register.

"According to the information we are receiving from the company working there, Gazprom, these sanctions will not affect the development of this field," Novak told reporters on the sidelines of the Eastern Economic Forum.

According to the US government, the field contains significant oil and gas reserves and any US exports and re-exports of drilling technologies to this area would violate the 2014 sanctions applied to Russia over its alleged role in the Ukrainian crisis.

Tech trade restrictions specifically outlaw the export of US products destined for deep-water and Arctic oil exploration and production, as well as shale oil projects in Russia.

Novak said Gazprom would continue working on the Yuzhno-Kirinskoye field, using the equipment already employed at the site. He said Russia had other foreign suppliers of the necessary equipment and was also working on import substitution.

Suspension of cooperation with the West prompted Russia to start working on an import substitution program. The military equipment and arms import substitution plan was finalized in December 2014.