We have noted before that, from our point of view, there is no reason to believe that the sanctions introduced earlier in July will have any significant impact on Russian crude oil production in the short and medium term. And we certainly do not envisage them being a threat to the industry’s development. On the other hand, off-shore development, particularly in the Arctic, is under threat. However, we are in any case cautious on Arctic shelf development as it is expensive and risky.
In the oil service sector, Eurasia Drilling and C.A.T. Oil are the key beneficiaries of possible new sanctions, we think. In our view, the Russian oil services market is quite self-sufficient or might easily replace European and US equipment with its own or Chinese variants in services like hydrocracking, horizontal drilling, high resolution 3D seismic, top-drives (for drilling rigs), PDC drill bit, LWD-MWD downhole telemetry and advanced mud-engineering.