The downing of Malaysia Airlines Flight 17 over eastern Ukraine, and the tougher sanctions against Russia that followed, are prompting some big multinational energy companies to take a fresh look at the ramifications of the crisis.

For months, US and European energy players have continued to sign deals with Russia, maintaining a posture of business as usual. But industry executives are starting to acknowledge that the escalating tensions could hurt Western oil and gas giants with major Russian investments, 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. The company warned that further sanctions could harm BP’s income, production and reputation.

French 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 US sanctions last month. Total’s chief financial officer, Patrick de La Chevardière, also indicated that the company was considering how the sanctions might affect projects, like a multi-billion 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 US and the EU have agreed on a round of sanctions that appeared as if they might have real teeth.

“The companies are facing the harsh reality that the US and the EU 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 organisation. In a previous round of sanctions, the US placed some financial restrictions on Russian energy companies like Rosneft and Novatek.

Technology

The latest sanctions go further in an attempt to curb the export of highly specialised equipment needed to develop Russia’s new energy frontiers, including the Arctic and shale rock formations in West Siberia. Companies like Total and Royal Dutch Shell have poured money into Russia in recent years. And a drilling rig to be operated by Exxon Mobil and Rosneft is being transported to Russian Arctic waters. Western oil and gas executives, along with their lawyers, are pondering the sanctions’ impact.

It is uncertain what types of equipment or software they may be prohibited from using in Russia. “Technology is a very hard thing to define,” said Dudley of BP. “So we will have to read it very carefully.”

Dudley also said that it was unclear whether BP would be allowed to proceed with a shale oil venture with Rosneft; the companies reached a preliminary agreement over the deal this year. Exxon Mobil, Shell and Total also have shale ventures in the country.

As the companies assess the situation, Russia’s energy future remains in limbo. Russia rivals Saudi Arabia as the world’s leading oil producer, and it was second to the resurgent US in natural gas production last year. But Russia’s traditional oil fields in West Siberia, which have sustained the country’s output for decades, are in decline.

To avoid further drops in production, Russia’s industry, which is not yet fully modernised, needs access to Western technology, allowing oil companies to push into ocean waters more than a mile deep or produce oil from shale. That technology is the main reason Russia has sought help from global oil majors like Exxon Mobil, which is producing oil off Sakhalin Island in eastern Russia.

“If the new sanctions stay in place for an extended period of months or years they will have an impact on Russia’s ability to grow or even maintain oil production,” said Richard Mallinson, an analyst at Energy Aspects, a research firm based in London.

Shale

Perhaps Russia’s greatest short-term hope for increasing production is to extract oil from shale. Russia is considered to have huge, albeit unproven, potential. But the latest Western actions target shale gas.

Any efforts to make the most of these shale formations would be slowed if the sanctions blocked service companies like Halliburton from exporting technologies including hydraulic fracturing and horizontal drilling that have changed the energy industry in the US.

The processes are mostly highly adapted versions of practices that have been around for decades, like hydraulic fracturing or the pumping of water and other liquids down wells at high pressure to break oil and gas free from the surrounding rock. Some analysts say the shale technologies may be hard to block through sanctions because they are essentially adaptations of decades-old techniques.

Arctic and deep-water drilling equipment may be easier to restrict, analysts say. The EU plans to prohibit not only the sale but also the transfer of specially adapted drilling rigs and machinery to Russia, according to an official who briefed reporters on the details of the sanctions. The official estimated that Russia relied on the EU for 30-60 per cent of these technologies.

While they represent just €150 million (Dh740 million) in annual sales, they are crucial for projects worth billions. The EU is walking a fine line. Heavily dependent on Russian energy, particularly gas, the EU wants to use the sanctions to target future projects in shale and in the Arctic without hurting existing production and disrupting global markets.

Export market

The gas sector will be excluded, which could lead to complications because, in many cases, oil and gas are produced with much of the same equipment and from the same locations. Over the past 10 to 15 years, Western companies have become increasingly enmeshed in Russia with the blessing of their governments.

Unlike Saudi Arabia, which largely prohibits foreign participation in oil and gas exploration and production, Russia has welcomed Western investment. Without Russian production, the oil export market would be even more dominated by the Saudis and other Opec producers.

Among the Western players, BP may have the most to lose. In the second quarter of 2014, BP’s stake of almost 20 per cent in Rosneft produced nearly one-third of the company’s oil and gas production and nearly 20 per cent of its profits. Total has an 18 per cent stake in Novatek.

Exxon Mobil has a joint venture with Rosneft to drill in the Kara Sea in the Russian Arctic, which some executives think could be a frozen Gulf of Mexico in terms of the oil it holds. The rig operated by the two companies, now sailing toward the Kara Sea from Norway, is expected to drill the first well for the joint venture this summer.

“We are assessing the impact of the sanctions, said Alan T. Jeffers, an Exxon spokesman.