American Oracle has tightened the terms for providing products and services to Russian customers from the oil and gas industry included in the US sanctions list. Since January 29, Oracle has banned both new transactions with them, as well as the extension, modification and renewal of existing contracts. The ban touched on Gazprom, Surgutneftegaz, LUKOIL and Rosneft, their subsidiaries and foreign projects. Dependence of the US oil and gas industry under foreign sanctions on foreign software from 2014 is still high and a complete ban on Oracle products will cause great damage to the industry, market participants believe.
American Oracle warned its Russian partners about compliance with new US requirements for oil and gas customers, the company's letter of January 12 (available to Kommersant). This is a ban on providing, exporting or re-exporting goods, services and technologies in support of deep-sea and Arctic offshore exploration, production or shale projects with oil production potential, if a person covered by US Directive No. 4 is involved in them. The ban applies to projects that started on January 29, 2018 or later. The restriction also applies to any renewals, changes or renewals of already concluded contacts. It does not apply only to the provision of financial services, for example, accounting or insurance. Transactions that do not meet the requirements may be delayed or rejected, warned Oracle.
The letter is accompanied by a list of companies subject to sanctions. There are 283 names in it, including enterprises of Gazprom, Rosneft, LUKOIL and Surgutneftegaz. Sanctions apply to those structures in which the share of the listed company is 33% or has the majority of voting rights. In LUKOIL, Rosneft and Gazprom declined to comment. Gazprom Neft, Surgutneftegaz and Oracle did not respond to the request from Kommersant.
Directive No. 4 of the sectoral sanctions of September 12, 2014 came out in compliance with the US President's Decree No. 13662 of March 20, 2014 and was devoted to export control in relation to the oil and gas industry of the Russian Federation. The US Treasury updated the directive on October 31, 2017. In 2014, restrictions were imposed only on projects for the development of deep-sea, offshore Arctic and shale deposits in the Russian Federation or in its territorial waters owned by Russian companies on the sanctions list, explains Alan Kartashkin, managing partner of Debevoise and Plimpton LLP. But in 2017, restrictions were extended to any projects regardless of their location, if the company, entered on the sanctions list under Directive No. 4, owns at least 33% of the voting interest or the majority of voting rights. The existing projects will not be affected, the head of Borenius law firm Anna Zabrotskaya explains.
Large Russian oil companies use Oracle Primavera for project management, including mining. A Kommersant source in one of the oil companies believes that a complete ban on software from Oracle will cause great damage to the industry, the dependence of the Russian oil and gas industry on foreign software is still very high. In the industry, many Oracle solutions are used, Kommersant's interlocutor confirms in a large IT distributor. These can be individual solutions or in conjunction with products of other developers, for example, the use of Oracle DBMS for SAP solutions, which are implemented in almost all oil companies in Russia.
At the same time, the source of Kommersant notes, large customers of Oracle software, such as Rosneft or Gazprom, have a lot of structures and third-party businesses that are not directly related to oil production, which may not face constraints. "With many companies on the sanctions lists, the case-by-case approach works, and often the question can be resolved," he adds.
Oracle is not the first American company toughening work with Russian customers because of sanctions. According to Reuters, at the end of 2017 Merlion and RRC, Russian distributors Microsoft, introduced new restrictions on the sale of its software to more than 200 companies in Russia. However, Kommersant's source in one of the Russian distributors says, one can not say that with the introduction of amendments to sanctions in the fall of 2017, work has slowed dramatically: it "continues at all levels."
Compliance with restrictive conditions is imposed mainly on the shoulders of distributors, who in turn work with resellers in the Russian legal field on the basis of concluded contracts - and sanctions, as well as their tightening, do not abolish these contractual relations, the source of Kommersant adds: "Both vendors, distributors, and resellers work closely together in each sanction case. Often, it is possible to find options that satisfy all aspects of the process both legally and economically. Simply put, the work did not stop, there is no panic. "
After the introduction of sanctions, the authorities of the Russian Federation announced a policy of import substitution, but domestic developers have not yet used it fully. For example, as reported by Kommersant in September 2017, federal state information systems continue to operate mainly on Microsoft database management systems (38.6%) and Oracle (25.4%), while Russian counterparts use only 2.9 %. In September, the same software Oracle for 480 million rubles. bought Moscow: the domestic software does not yet meet the requirements, then explained in the City Hall.