sanctions pressure shifts for foreign oilfield services in Russia
Rising sanctions on Russia have pushed foreign oilfield services firms to rethink their activities in the country and, in some cases, to weigh a withdrawal from the market. Observers note that these developments follow a wave of measures aimed at restricting Russian energy ventures, with major implications for international operators. The situation has prompted several companies to adapt their strategies in order to comply with evolving rules and to manage risk in a volatile environment. Attribution: Kommersant.
The European Union has implemented blocking sanctions against Russian oil companies, effective from May 15. These sanctions have influenced how foreign oilfield services companies conduct business inside Russia. In notable moves, Baker Hughes terminated all contracts tied to sanctioned firms, signaling a firm stance toward compliance and risk control. Schlumberger announced a restructuring plan that involves transferring the Russian branch’s property to a new legal entity, followed by a transfer to a local company. Such transfers illustrate how multinational players are reshaping corporate structures to navigate the updated regulatory landscape. Attribution: Kommersant.
Legal specialists have highlighted the immediate constraints facing EU registered entities, sub-sanctioned companies, and individuals associated with sanctioned actors. According to Daria Zakabuni of the Vegas Lex Special Projects Group, from May 15 onward these entities cannot take any action, directly or indirectly, that supports or benefits the sanctioned network. The emphasis is on preventing circumvention and ensuring strict adherence to the new rules. Attribution: Kommersant.
Industry observers also note that subsidiaries of oilfield services firms operating in Russia may not be immediately bound by the bans. However, their future activities are likely to hinge on directives from their parent offices in Europe, raising concerns about potential gaps in enforcement and the real possibility of non-cooperation if headquarters impose stricter controls or pullback decisions. In this way, the sanctions landscape introduces an additional layer of uncertainty for local operations while underscoring the leverage held by European parent companies. Attribution: Kommersant.
Earlier, at the end of April, Halliburton, another major global player in oilfield services, decided to suspend work on several contracts in the Russian Federation. This move was reported by TASS with reference to company representatives, and it was anticipated that the execution of those contracts could be interrupted by mid-May. The trend reflects a broader alignment among international service providers with sanction policy, as they reassess risk, regulatory compliance, and long-term strategic priorities in a market characterized by heightened political and legal scrutiny. Attribution: Kommersant.