Investor Presentaiton
US Sectoral Sanctions - OFAC (cont'd)
Energy (cont'd)
For in-Russia projects, the Directive 4 reference to "in Russia or in other maritime
area claimed by [Russia] and extending from its territory" - is understood to
mean/include
Any offshore areas (inland / territorial seas, EEZ or Shelf): this is per a BIS FAQ answer,
and analogous explanations under other-country sanctions rules (and is consistent with EU
Reg. clarifications) - but see the cautionary note at bottom of slide 39
And Caspian Sea zone claimed by Russia (the similar EU sanction might not cover this?)
As well as the Black Sea shelf area extending from Crimea (despite non-recognition by US
as being part of Russia)
And note the FAQ 414 clarification that this sanction doesn't apply if an otherwise-
covered project has the potential to produce only gas
-
But does apply if potential for both (often not clear; per factual / evidentiary showing)
And note that BIS (and likely OFAC too) considers condensate = oil (even though the old
ban on export of US crude oil, which gave rise to the equivalence rule, has been lifted)
And most Russian gas fields have some condensate (as South Kirinsky does)
Morgan Lewis
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