PUTIN’S RESET

strategic/political agenda in his “near abroad.” Russia’s political influence in the
region would also surely have been set-back, the centerpiece of which is to return
Russia to its former geopolitical stature, lost with the collapse of the Soviet Union.
By seizing these Ukrainian assets, Russia has helped assure its sway, and in some cases
dominance, with regard to European energy markets.
THE SEIZING OF CRIMEA’S OFFSHORE ASSETS
After the annexation of Crimea, Russia moved quickly to secure all relevant,
Ukrainian energy equipment and infrastructure. The primary Ukrainian energy
company operating in Crimea (Chornomornaftogaz) was quickly nationalized, and
Russia began to consolidate its control over formerly Ukrainian drill rigs. Over the
summer of 2016, Ukrainian forces proved unable to oppose Russian efforts to deploy
one of these Ukrainian rigs seized during the annexation within Ukraine’s EEZ.
Armed Russian vessels escorted the rig as it performed exploratory drilling. 289 Not
coincidentally, Russia’s updated Sea Doctrine calls for the Federal Security Service
(FSB) and the Navy to provide greater protection for its Black Sea assets. Moreover,
the Russian Navy has undertaken a number of War Games and exercises in the Black
Sea in the period since.
After Romania discovered a deep water gas field in its offshore waters in 2012,
President Putin almost immediately, in April 2012, signed an accord with Eni to
explore Russia’s Black sea shelf. Eni agreed to finance the entire $1 to $1.2 billion of
the initial exploration costs and agreed to undertake drilling operations with Rosneft.
Oil production from Russia’s Black Sea shelf has yet to begin under the Eni/Rosneft
partnership. Rosneft also had a deal with ExxonMobil for Black Sea drilling, which
was terminated by Western sanctions and cost Exxon over $1 billion in lost
revenue. 290
Prior to the Russian annexation of Crimea and occupation of eastern Ukraine,
a number of western energy majors were tasked by Kiev to explore energy deposits in
Crimea’s offshore waters. ExxonMobil, Royal Dutch Shell and others performed
exploratory operations in the Black Sea, the results of which led petroleum analysts to
believe it may rival the size of the original deposits found in the North Sea.
Accordingly, it is estimated that the value of these resources may exceed $1 trillion.
Moreover, a Columbia University Marine geologist, William Ryan, stated that the
seized offshore reserves have the highest potential production value of any in the
Black Sea. Between 2011 and 2014 (when the annexation took place), Crimean gas
112