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Should the United States impose more and wider-ranging sanctions on the major Russian oil and gas companies, it would cripple the energy systems in Europe, Bob Dudley, chief executive at BP which holds just below 20 percent in Rosneft, said on Wednesday.
“I do not think that would happen. If sanctions were put on Rosneft or Gazprom or LUKoil like what happened with Rusal, you would virtually shut down energy systems of Europe, it is a bit of extreme thing to happen. We invest in Russia carefully, not just in Rosneft,” Russian outlet Sputnik quoted Dudley as saying at the Oil & Money 2018 conference in London today.
Dudley noted that he sits on the Rosneft board because of BP’s large stake in Russia’s biggest oil producer, and added that the UK supermajor strictly complies with international sanctions against Russia.
In recent months, U.S. legislators have been preparing several bills at various committees to target Russia’s energy and banking industries, seeking to “escalate economic pain” because of Russia’s malign activities. According to U.S. officials, the existing sanctions on Russia’s energy have already resulted in curtailed investment in Russian oil and gas exploration projects necessary to grow Russia’s production.
Russia’s own natural resources ministry admitted that the sanctions had hampered natural gas project developments in the country. In a report about Russia’s oil and gas resources and their development for the period 2016-2017, the ministry said that sanctions against Russian oil and gas companies that limit the flow of foreign investment, new technologies, and equipment for the sector complicate the development of new projects in Russia, especially in offshore areas and in hard-to-extract resources. In the period 2016-2017, not a single significant gas project was launched, while gas firms focused instead on working at already operational projects, the Russian ministry said in its report.
The U.S. has also hinted that it could sanction the Nord Stream 2 gas pipeline project led by Russian gas giant Gazprom, which already holds more than one third of the European gas market and continues to grow its dominance.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.