A bipartisan coalition in Congress is calling for the Biden administration to strengthen sanctions on Russia’s oilfield services industry, claiming that current regulations are allowing a major US company to support Vladimir Putin’s war efforts. The group has also requested clarification from the Treasury and State departments regarding transactions involving Houston-based SLB, formerly known as Schlumberger, which imported equipment worth $17.5 million into Russia between August and December of last year. SLB is the largest oilfield services company in the world.
This demand from Congress comes after a Financial Times investigation in August revealed that SLB has been expanding its operations in Russia, taking advantage of the withdrawal of Western competitors despite international sanctions in response to Russia’s invasion of Ukraine. More than 50 members of Congress signed a letter addressed to Secretary of State Antony Blinken and Treasury Secretary Janet Yellen, expressing concerns that the company is indirectly supporting Putin’s actions in Ukraine.
While representatives from the State Department and SLB did not respond to requests for comment, the Treasury Department stated its commitment to using all available tools to limit the Kremlin’s revenues and hinder Russia’s war efforts. Despite allegations that SLB’s work in Russia contributes to the Kremlin’s finances, comprehensive sanctions on oilfield services in Russia have been avoided due to concerns about the impact on fossil fuel exports and global oil prices.
In July 2023, SLB announced a halt in shipments of products and technology to Russia from all its facilities worldwide in response to expanding international sanctions. However, records obtained by the FT show that imports from other sources continued, with $3.3 million worth of equipment falling under categories subject to controls if exported from the EU. The majority of imports came from China, with additional items sourced from India, countries that do not apply the same controls.
Despite the exit of its major US rivals from the Russian market, SLB’s Russian business signed new contracts last year and has been actively recruiting employees in the region. Members of Congress, such as Lloyd Doggett and Jacob Auchincloss, have raised concerns about US companies operating in Russia, suggesting that it indirectly supports the ongoing conflict in Ukraine.
SLB has denied expanding its Russian business and insists it is complying with sanctions, stating that its hiring activities were aimed at replacing personnel lost due to attrition rather than new investments in Russia. Congress is questioning the exceptions to the current sanctions regime that SLB may have utilized, urging stricter measures to limit Putin’s profits and support Ukraine.
Despite facing previous sanctions violations, SLB remains operational in Russia under US law but must avoid importing new technology or expanding operations to prevent violating sanctions. The company’s recent business activities in Russia have drawn scrutiny from Congress, prompting inquiries into the effectiveness of current sanctions regulations in relation to SLB’s operations. Hello! How can I assist you today?