The West will no longer be able to liquidate its companies’ holdings in Russia in the banking and energy sectors by the end of the year. This was ordered by a decree recently signed by the President Wladimir Putin obliges companies in countries labeled “hostile” to maintain their economic presence in the Federation and prevents them from liquidating their assets in the specified sectors by selling them to local players, as has been done by several major Westerners in recent months was announced British Petroleum to Societe Generale.
The move appears to be Moscow’s direct response to the formalization of European policy to cut gas consumption and green light Russia’s coal embargo, as well as renewed confiscation and freezing of assets (company shares, oligarch-owned gold) in the United States and the United Kingdom. And it has systemic importance for three reasons: First, Russia intends crystallize the inner situation preventing western actors from unilaterally leaving the country by taking out their technical skills, deconstructing market dynamics that Moscow wants to keep intact if it believes better times will return. Second, he wants to avoid emphasizing the flight of capital and skills in the country. After all, it wants to exert indirect pressure on the former partners’ governments by shielding itself behind their companies: any sanctions and restrictions imposed on the Russian domestic market will harm the local branches of the corporations that will be prevented from leaving Russia.
According to Energy Intelligence, Putin’s decree in the energy sector will primarily affect those projects that the Moscow government does not want to continue without the support of Western capital. The decree “applies to Kharyaga’s production-sharing agreement, in which France’s Total and Norway’s Equinor previously announced the transfer of their stakes (20% and 30% respectively) to the operator Zarubezhneft”; In addition, it “temporarily prevents BP from selling its 19.75% stake in Russian oil giant Rosneft and prevents US-based Exxon Mobil from selling its 30% stake in the Sakhalin-1 oil project in the Far East. Russian”. Be interested, maybe too Is in that which plans to sell its 56.43% stake in Enel Russia (which owns three 5.6 GW power plants and two wind farms) to Lukoil and the Gazprombank-Frezia fund.
The list of companies identified as targets for this maneuver will be released this week at the initiative of the central bank governor Elvira Nabiullina. The appreciation of the ruble makes it imperative for Moscow to keep foreign financial players on its soil. Citigroup, for example, said it was phasing out the country long ago, but announced exposure to Russia of $8.4 billion as of June 30, up from $7.9 billion at the end of the first quarter has increased slightly. Among the Italian banks, they would be an optimal target for a containment maneuver Unicredit and Intesa. In June, Piazza Gae Aulenti halved its remaining exposure to Russia from $5.4 billion to $2.7 billion and, according to Il Messaggero, “has been working for some time to sell its assets to sanctions-hit non-EU countries rather than to to sell”. A step that may now be impossible to carry out. However, two weeks ago Intesa downgraded its holdings in Russia by 1.13 billion and is evaluating the future of its presence in the country.
In this context, Putin’s counter-sanctioning maneuver requires active reflection on how the economic war can take different forms today. The Russian strategy coexists with strategies to steal the assets of companies that have announced their exit from Russia, strategies aimed at raising Europe’s energy bills, and sectoral embargoes in the areas where Moscow jointly manages its strategy. The intersection between energy markets and finance is now one of Europe’s weak points and has been Russia’s anti-sanctions lifeline, which has traditionally used exports of gas, oil and coal to defend the ruble.
Preventing Westerners from leaving this sector means, among other things, trying to send a message of strength in a context where sanctions are interfering with many productive activities but saving the hard core of the Russian system. In its own way, however, this “freeze” policy also shows that Russia is not technologically independent and sovereign in some vital areas. The same applies to the West as to Moscow: any sanctions policy is a two-faced Janus. Highlighting both the strengths and weaknesses of a system. Who don’t miss out on Moscow. The certainty for the time being is that of great instability. To be evaluated carefully as autumn approaches and with it the specter of a full-scale conflict over sanctions, energy and currencies.