The oil industry has warned US lawmakers that proposed new economic sanctions on Russia approved by the US Senate could take their toll on US jobs and oil and gas projects around the world, the FT reported. American oil and natural gas companies are pushing for changes to avoid unintended consequences.

The legislation, which passed with a 97-2 vote in the Senate in June and is now with the House of Representatives, would prohibit US individuals and companies from providing goods, services or technology for deepwater, Arctic offshore or shale projects where Russian companies are involved, according to the newspaper.

Alexei Kokin, a senior oil and gas analyst at UralSib Financial Corp in Moscow, told New Europe by phone on July 20, “It’s still unclear at this point what happens and how this bill is going to be changed perhaps in Congress”.

“The problem here is if you only prevent Americans from getting these contracts, especially construction contracts, it means giving preference, essentially handing an advantage mostly to Europeans,” Kokin said, adding that Washington-based policymakers should also find a way to put pressure on European companies to stay apart from these projects as well. “Otherwise you are hurting American competitiveness so I would presume that if the sanctions actually are imposed on the pipeline projects, there should be a way for Americans to also prevent Europeans from any involvement,” he said. “So everybody will suffer and that’s it,” he added, laughing.

Oil executives and industry representatives reportedly have warned that the broad proposed rules could hurt the competitiveness of US companies and potentially hamper oil and gas production in many countries other than Russia.

Kokin said the bill could also affect European companies that have substantial presence in the United States.

Last month, media reported that German and Austrian companies investing in the Russia Nord Stream-2 gas pipeline from Russia to Germany are going to be hit hard if the US bill extending sanctions against Russia goes into law.

German Foreign Minister Sigmar Gabriel and Austrian Chancellor Christian Kern were quoted as saying in a joint statement that Europe’s energy supplies were “a matter for Europe, not for the United States”.

“It’s actually a very, very complicated situation if Nord Stream and Turkish Stream are sanctioned or American contractors and all companies with some business in the US get targeted,” Kokin told New Europe. “I think it’s too early to talk about this because after all presumably the bill will leave it up to the Presidential Administration to decide whether to sanction these projects or not,” the Uralsib expert added.

“I don’t see how sanctions can work in Europe without creating serious issues because if European companies are prevented in doing business with Gazprom and Russia more generally by an order from Washington, that basically is not the kind of situation that Berlin and other major capitals would tolerate,” Kokin said.

“Politically it’s not great when in a sense Washington can tell German companies to stay away from Russia. So it creates a difficult situation where either all Americans get shut out of these projects which is not good for American business in Europe or there’s a way to essentially prevent everybody which Europeans would see as interference so it’s unpredictable at this point. Maybe the sanctions will get weakened. I don’t know,” the Moscow-based oil and gas analyst said.

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