Ukraine crisis: Russian retaliation could hit Western mulitinationals - 0 views
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"There no doubt would be Russian retaliation," said Justin Logan, director of foreign policy studies at the Cato Institute. "Companies with money tied up in Russia would have a tough time getting it back out."
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The White House said Friday that President Barack Obama and the leaders of Germany, the United Kingdom, France and Italy agreed after a conference call that they're ready to inflict targeted sanctions against Russia if Moscow es
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The lion's share of foreign money in Russia is from major energy sector players like Shell, Exxon, and BP, said Fadel Gheit, senior energy analyst at Oppenheimer
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Shell is working with Gazprom on natural gas extraction in Russia; Exxon has a multibillion dollar exploration partnership with Rosneft, a major oil producer controlled by the Russian government, and BP owns nearly 20 percent of Rosneft.
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"Shell and Exxon have physical assets in Russia," said Gheit. "But pound-for-pound, BP has the biggest exposure in Russia." Although BP may have the most to lose from an economic tug-of-war between Moscow and the West, tough lessons that BP learned in Russia—through a defunct partnership with Rosneft called TNK-BP—also make BP best equipped for any future fallout, said Nicholas Spiro, managing director of Spiro Sovereign Strategy.
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Spiro said that several German firms have also steeled themselves for possible fallout from friction between the Russia and the West. "German companies are huge here," said Spiro, naming BASF, energy firm RWE, and Siemens as companies with operations in Russia. BASF is working to finalize a deal with Gazprom that would give it a stake in Siberian oil fields; RWE has reached a preliminary deal to sell its natural gas subsidiary to Russian billionaires Mikhail Fridman and German Khan, and Siemens has a partnership with state-run railroad monopoly Russian Railways. Late last month, Siemens CEO Joe Kaeser made a trip to Moscow to meet with Russian President Vladimir Putin at his residence and voice support for a "trusting relationship" with Russian companies.
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"It starts with Germany and works its way down," said Hogan. "They have the most trade back-and-forth, and Germany gets the highest percentage of its energy from Russia."
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Alcoa owns aluminum fabrication facilities in Russia, and Boeing has a design center in Moscow, as well as a joint venture with VSMPO-Avisma, the world's largest titanium producer.
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Members of the Russian parliament have also proposed charging international payments companies like Visa and Mastercard with pre-emptive "security fees," with the stated aim of preparing for future financial disruptions.