On December 22, 2022, Presidential Decree No. 943 on the application of special economic measures in natural gas supply due to unfriendly actions by certain foreign states and international organizations (Presidential Decree No. 943 of December 22, 2022) enters into force.
Pursuant to the Russian President's Decree No. 943 dated December 22, 2022 Gazprom and its affiliates are prohibited from settling liabilities to foreign parties directly or indirectly related to unfriendly countries until October 1, 2023:
payment for combustible natural gas, gas condensate produced at the Achimovsky deposits of the Urengoy oil and gas condensate field, if the amount of obligations is calculated at a price for combustible natural gas, gas condensate, exceeding the ceiling price established by the Russian Government;
payments for supplies of combustible natural gas produced at the Yuzhno-Russkoye gas field if liabilities are calculated at a price of combustible natural gas in excess of the ceiling price set by the Government of the Russian Federation; and
payments for services related to the extraction of combustible natural gas, gas condensate at the Achimovsky deposits of the Urengoy oil and gas condensate field, in case the amount of fees for such services exceeds the ceiling price established by the Government of the Russian Federation.
The fee limits shall be set by the Russian Government within 10 days from the effective date of Presidential Decree No. 943 of 22 December 2022. Obligations in the part exceeding these limits are considered to be fulfilled.
The prohibition applies to obligations which are due after 1 March 2022, but does not apply to obligations under trades executed at organised trading.
Given the fact that the Achimovskoye, Yuzhno-Russkoye and Urengoyskoye fields are joint projects of Gazprom and Western companies Wintershall Dea (Germany), OMV (Austria) and BASF (USA), the ban imposed by Presidential Decree No. 943 of 22 December 2022 will above all affect these companies.
Nadmitov, Ivanov & Partners advises on sanctions and counter-sanctions, including in the energy sector.
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