European oil majors including Shell and OMV signed new cooperation deals with Russian energy companies during the St. Petersburg International Economic Forum this week, in a sign that they were willing to make new investments despite risks of potential new sanctions. Since 2014 when the US and other Western countries introduced sanctions against Russia, Russian energy companies have operated with limited access to Western financing and some type of oil production technology.
This had made Western majors more cautious about signing up to new investments, with some companies winding down cooperation that could be in breach of sanctions. Cooperation on conventional hydrocarbons projects continues to grow, however. Deals signed this week included Shell, Gazprom Neft, and Spain’s Repsol agreeing to jointly develop hydrocarbons projects in the Russian Arctic. This followed an agreement Thursday between Shell and Gazprom Neft to set up a West Siberian oil joint venture to develop fields with combined estimated reserves of more than 8 billion barrels.
Other deals included Austria’s OMV agreeing to purchase terms for a stake in a gas project in northern Russia, as well as a preliminary LNG deal with Russian gas giant Gazprom. There are also signs that Russian and Western companies are considering to increase cooperation in other countries.