(Adds details on sanctions, paragraphs 4-6)
NEW YORK, July 17 Morgan Stanley does not
believe new U.S. sanctions on Russian oil company Rosneft
will affect a pending deal between the two companies,
the bank's chief financial officer said on Thursday.
The bank's management is moving ahead with plans to sell the
majority of its global physical oil trading operations to
Rosneft later this year, CFO Ruth Porat said in an interview.
"Recognizing the guidance was just released last night, we
don't believe it applies to our transaction," she said. "We
continue to do all the work necessary for closing by the end of
the year, obviously subject to regulatory approval."
Her comments come a day after the U.S. government imposed
its toughest sanctions yet on some of the key players in the
Russian economy over what Washington says is Moscow's reluctance
to curb violence in Ukraine. The move closed off medium- and
long-term dollar funding to Rosneft, the country's
second-largest gas producer Novatek and its third-largest bank,
The measures stopped short of freezing the companies'
assets, restricting the short-term funding the companies need
for day-to-day operations or stopping U.S. firms doing business
But they had raised some doubts about whether mounting
political tensions with Moscow could complicate the bank's deal
to sell the majority of its global physical oil trading
operations to Russia's largest oil producer.
The Wall Street bank agreed to the sale in December before
Russia launched an incursion into Ukraine's Crimean peninsula.
It recently submitted the transaction for review by the U.S.
Committee on Foreign Investment (CFIUS), an inter-agency
executive branch panel that examines foreign investment for
potential threats to national security.
(Reporting by Lauren Tara LaCapra and Josephine Mason; editing
by Franklin Paul, Tom Brown and Matthew Lewis)