Company Managing Russia’s CPC Stake Hit by UK Sanctions

The UK has sanctioned Transneft, Russia’s main oil pipeline operator and the manager of Moscow’s 24% stake in the Caspian Pipeline Consortium (CPC), Orda.kz reports.

On 24 February, the British government expanded its Russia sanctions list by 297 entries. Of these, 240 were Russian companies, including several mid-sized banks, subsidiaries of Rosatom and Gazprom, and seven individuals. Companies from China, India, Thailand, and the UAE were also hit by restrictions, along with two Georgian TV channels.

London justified the sanctions against Transneft on the grounds that it operates in the energy sector, which is of strategic importance to the Russian authorities. Transneft owns the world’s largest network of trunk pipelines and is responsible for around 80% of Russian oil exports, including via the Druzhba pipeline. Kazakhstan has been using this pipeline to supply Germany with crude since 2023. Until now, Transneft had avoided being added to sanctions lists.

It also manages 24% of the shares in the CPC, representing Russia’s stake. Another 19% belongs to Kazakhstan through KazMunayGas. The remaining shares are owned by American companies: 15% by Chevron, 12.5% by Lukoil (which fell under US sanctions in October last year and sold its foreign assets), 7.5% by ExxonMobil, and 7.5% by a joint venture between Rosneft and Shell.

Against the backdrop of the sanctions news, Transneft’s preferred shares on the Moscow Exchange fell by 1.18%. At the session low, the decline reached 1.7%.

Original author: Alexey Afonsky