U.S, EU Ready New Energy Sanctions on Russia

WASHINGTON--U.S. and European Union officials are close to imposing the toughest round of energy sanctions yet, which would hit both Russia's energy industry and companies like Exxon Mobil that are working with state-controlled oil companies.

The sanctions would ban U.S. and European companies from working with Russia on future oil exploration in the Russian Arctic, deep seas and shale rock formations, according to a U.S. official who would only speak on the condition of anonymity because details of the sanctions package aren't yet final.

The sanctions wouldn't affect current oil production, but could imperil the future of existing partnerships, including a deal between Exxon Mobil Corp. and Rosneft, the Russian-owned oil company, to drill in the Arctic Ocean.

"It's a very big deal," the official said, declining to say when the announcement would be made, which depends on when or if the cease-fire holds between pro-Russian separatists and Ukraine.

Bloomberg News first reported the sanctions Wednesday afternoon.

It isn't clear when the planned sanctions would be enacted. The EU this week approved a new round of sanctions against Moscow, including a range of energy restrictions, but has held off enacting them while negotiations continue between Moscow and Kiev. The precise details of this new EU package haven't been released.

The U.S. and EU have coordinated on parallel sanctions banning the use of American and European expertise and technologies to Russia, which depends upon both to develop its own energy resources.

Write to Amy Harder at [e-mail] and William Mauldin at [e-mail]

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