OAO Rosneft, the world’s largest publicly traded oil producer, fell to the lowest level in 10 months in Moscow after the U.S. included CEO Igor Sechin in a sanctions list.
The shares lost 1.7% to 219.80 rubles (US $6.12) by the close in the Russian capital, declining for a sixth day to the lowest since June 19. Rosneft’s global depositary receipts slumped 1.8% in London to the weakest level since September 2012. The company was among six government-related entities whose ratings were cut to BBB- by Standard & Poor’s, the lowest investment grade, after the shares stopped trading.
“It’s pretty unpleasant when the CEO of the biggest oil companies is placed on such a list,” Alexei Kokin, an analyst at UralSib Financial Corp., said by phone. “It’s really important to find out whether the company itself will be sanctioned in the future.”
The Obama administration imposed penalties on Sechin and six other Russian officials, as well as 17 companies linked to Russian President Vladimir Putin’s inner circle in the banking, energy and infrastructure industries. The sanctions are being imposed in conjunction with the European Union, which added 15 names to its list today.
American companies and individuals aren’t banned from doing business with Rosneft as the sanctions against Sechin don’t apply to the oil producer, said a U.S. Treasury official who requested anonymity to provide additional details on the sanctions announcement.
The U.S. and EU say Russia hasn’t lived up to an accord signed April 17 in Geneva intended to defuse the crisis in Ukraine. The Obama administration warned it’s prepared to levy additional penalties to hit the broader Russian economy if Putin sends troops into Ukraine.
Shares of BP lost as much as 1.9% in London, the most since March 20, before closing 1% lower. BP holds a 19.75% stake in Rosneft and its CEO, Bob Dudley, has a seat on the oil company’s board.
The seizure of international inspectors by pro-Russian separatists last week raised the stakes in the crisis after Russia began military exercises on Ukraine’s border, where the North Atlantic Treaty Organization says Putin has massed about 40,000 troops.
“Russia has done nothing to meet its Geneva commitments and in fact has further escalated the crisis,” the White House said in an e-mailed statement.
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