On 10 January 2025, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and the UK’s Office of Financial Sanctions Implementation (“OFSI”) announced the designations of two major Russian oil companies, PJSC Surgutneftegas and Gazprom Neft. The US and the UK have introduced new general licenses to permit limited activity relating to these entities, detailed further below. OFAC also designated numerous energy sector parties and issued a new Russia-related petroleum services prohibition.

The US Department of the Treasury’s press release is available here and the full OFAC notice is available here. The full OFSI notice announcing these designations is available here.

I. US Sanctions Actions

Energy Designations Authority and Energy Sector Designations

OFAC issued a new determination pursuant to Executive Order (“EO”) 14024, authorizing sanctions designations against persons operating or having operated in the energy sector of the Russian economy. Under the dual authorities of EO 13662 and EO 14024, OFAC has designated PJSC Surgutneftegas and Gazprom Neft as Specially Designated Nationals, along with more than 180 vessels and dozens of oil traders, oilfield service providers, insurance companies, and energy officials. Unlike designations under EO 14024, designations under EO 13662 cannot be revoked without certain Congressional oversight.

Petroleum Services Prohibition

OFAC also issued a new determination pursuant to EO 14071, prohibiting the export, reexport, sale, or supply (directly or indirectly) from the US or by a US person (wherever located) of petroleum services to any person located in Russia, effective 27 February 2025. This determination is subject to certain exclusions, relating to (1) isotopes derived from petroleum manufacturing for medical/agricultural/environmental purposes, (2) maritime transport services for products compliant with the G7 Russian crude oil price cap, and (3) divestiture/wind down services of an entity located in Russia that is not owned or controlled (directly or indirectly) by a Russian person.

General Licenses

OFAC issued the below general licenses (“GL”) for certain Russian energy sector wind down activity:

  • GL 8L (expiring 12 March 2025): Authorizing the Wind Down of Transactions Related to Energy
    • GL 8L supersedes and narrows the scope of GL 8K, which had a later expiration date of 30 April 2025 and was part of a series of GLs repeatedly extending a broader authorization of certain Russian energy transactions. In moving forward the expiration date, OFAC is signalling an intent to not renew the wind down authorization under GL 8L beyond 12 March 2025.
  • GL 115A (expiring 30 June 2025): Authorizing Certain Transactions Related to Civil Nuclear Energy
  • GL 117 (expiring 27 February 2025): Authorizing the Wind Down of Transactions Involving Gazprom Neft, Surgutneftegas, and Certain Additional Entities Blocked on January 10, 2025
  • GL 118 (expiring 27 February 2025): Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Gazprom Neft, Surgutneftegas, and Certain Additional Entities Blocked on January 10, 2025
  • GL 120 (expiring 27 February 2025): Authorizing Limited Safety and Environmental Transactions
  • GL 121 (expiring 28 June 2025): Authorizing Petroleum Services Related to Certain Projects

Relating to OFAC’s targeting of Sovcomflot vessels in this designation action, OFAC also revoked GL 93 (Authorizing Transactions Involving Certain Sovcomflot Vessels).

Frequently Asked Questions

Lastly, OFAC has also issued five new Russia-related FAQs (FAQs 1213–1217), relating to the scope of the new prohibitions and GLs above, and amended 14 others (FAQs 967, 976, 977, 978, 999, 1011, 1012, 1017, 1117, 1126, 1182, 1183, 1201, and 1203), largely to account for the new GLs superseding prior versions referenced in pre-existing FAQs. Key FAQs include:

  • FAQ 1213, which provides that OFAC intends to define the term “energy sector of the Russian Federation economy” as applied to the 10 January 2025 EO 14024 determination to include a wide variety of activities (e.g., procurement, drilling, gasification and regasification, testing, financing, distribution) involving Russia of a various energy products (e.g., crude oil, liquefied natural gas, coal, wood, nuclear power).
  • FAQ 1215, which clarifies that GL 26 is intended to ensure that transactions involving persons identified in GL 26 who are designated under both EO 13662 and EO 14024, which are authorized or exempt under the regulations implementing EO 14024 (Russian Harmful Foreign Activities Sanctions Regulations) , are also authorized under the regulations implementing EO 13662 (the Ukraine-/Russia-Related Sanctions Regulations) to the extent such transactions are prohibited by EO 13662 (with the exception of transactions prohibited under any of the four directives issued under EO 13662).
  • FAQ 1216, which provides that OFAC intends to define the term “petroleum services” as applied to the 10 January 2025 EO 14071 determination to include a variety of activities—e.g., exploration, drilling, well completion, trade, distribution, or marketing of petroleum, including crude oil and petroleum products—as well as any activities that contribute to Russia’s ability to develop its domestic petroleum resources, or the maintenance or expansion of Russia’s domestic production and refining.
II. UK Sanctions Actions

The UK also fully designated PJSC Surgutneftegas and Gazprom Neft, with consequent restrictions on making funds and economic resources available directly or indirectly to them or for their benefit, and prohibitions on dealing in their assets. Entities owned or controlled by the designated parties are also treated as designated.

The UK Government has introduced two general licenses in connection with these designations:

  • The General License: Russian Oil Exempt Projects (available here) permits business operations with Gazpromneft-Sakhalin LLC, its subsidiaries, and any third party, in each case in relation to the Sakhalin-2 project, until 28 June 2025.
  • The General License: Russian Oil Majors Wind Down (available here) permits the wind-down or divestment from any transactions involving PJSC Surgutneftegas and Gazprom Neft and their subsidiaries, until 05:01 on 27 February 2025.

The general licenses are subject to obligations to keep records for a minimum of 6 years.  Businesses seeking to rely on these licences should carefully review their operations to ensure that they meet the conditions.

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