The downing of Malaysia Airlines Flight 17 over eastern Ukraine — and the tougher round of sanctions against Russia that followed — is prompting some big multinational energy companies to take a fresh look at the ramifications of the crisis.
For months, American and European energy players have continued to sign deals with Russia, maintaining a posture that business was proceeding as usual. But top industry executives are now starting to acknowledge that the escalating tensions could sharply hurt Western oil and gas giants with major investments in Russia, as well as the service companies that are key technology suppliers.
"We are in the heat of a very emotional stage," Robert W. Dudley, BP's chief executive, told reporters on Tuesday. The company warned that further economic sanctions could harm BP's income, production and reputation.
France's oil giant, Total, which had been among the most committed to Russia, said that since the plane disaster it had stopped regularly adding to its stake in its Russian partner Novatek, a gas producer that was placed under sanctions by the United States this month. Total's chief financial officer, Patrick de La Chevardière, also indicated on Wednesday that the company was considering how the sanctions might affect other projects like a multibillion-dollar natural gas facility it is building with Novatek.
The industry's tenor has changed as Western governments directly target Russia's economic prospects, notably its energy industry. After months of settling for measures that seemed largely symbolic, the United States and the European Union on Tuesday agreed on a new round of sanctions that appear as if they may have real teeth.
"The companies are facing the harsh reality that the United States and the European Union have united on sanctions in a way that two weeks ago would have been inconceivable," said John Lough, a Russia analyst at Chatham House, a London-based research organization.