EU imposes economic sanctions on Russia

BRUSSELS/LONDON. — European Union governments reached a deal yesterday to impose economic sanctions against Russia, targeting its oil industry, defence, dual-use goods and sensitive technologies.
The sanctions will be reviewed after three months, a diplomat said.

The development came as Russian foreign minister Sergei Lavrov and his US counterpart John Kerry agreed in a phone conversation that fighting near the site where a Malaysian airliner crashed in eastern Ukraine needs to be stopped, according to Russia’s foreign ministry.

The west says flight MH17 was almost certainly shot down by pro-Russian separatists using a Russian-supplied surface-to-air missile.
Russia has denied supplying such a missile.

Meanwhile, British energy company BP warned that further sanctions against Russia could affect its profits, despite reporting a sharp rise in second quarter profits yesterday.

The oil giant, that owns a 19.75 percent-stake in Russian state oil company Rosneft, said the Ukraine crisis had not had a significant effect on its business yet, but could do so in the future.

“If further international sanctions are imposed on Rosneft or new sanctions are imposed on Russia or other Russian individuals or entities, this could have a material adverse impact on our relationship with and investment in Rosneft, our business and strategic objectives in Russia and our financial position and results of operations,” the company said.

Things could get harder with the European Union poised to announce tougher sanctions against Russia. BP acknowledged that its reputation was at stake over its ties with the Russian state oil giant.

Announcing its financial results for the second quarter of 2014, BP said underlying replacement cost profit was US$3.6 billion, 34 percent higher than a year earlier and 13 percent higher than the first quarter of 2014.

BP’s net income from Rosneft for the quarter was US$1 billion.

It also received a dividend payment of about US$700 million earlier in July.

“This was another successful quarter, delivering both operational progress and robust cash flow,” said Bob Dudley, BP group chief executive. — The Guardian/Xinhua.