“Political differences do not strongly affect serious business”: European majors eye slate of upcoming opportunities
Attendance at Russia’s St. Petersburg International Economic Forum is up from last year after many Western companies decided to back out of last year’s conference following Russia’s annexation of Crimea.
“A week before the beginning of the forum we have 5,072 confirmed applications, which is more than we had last year. Both the number of companies, and the companies’ top managers [planning to attend the forum] is increasing,” said St. Petersburg Governor Georgy Poltavchenko, reports Sputnik News. Poltavchenko noted that many of the companies were from the U.S. and Europe despite international sanctions against Russia.
The St. Petersburg International Economic Forum has been held annually since 1997. The event gathers heads of states and governments, as well as heads of international companies and prominent economic experts from around the world. The 2015 forum will be held June 18-20, and cover topics ranging from challenges in the global economy to human capital and talent development, according to the forum’s program.
BP Group Chief Bob Dudley and Rosneft CEO Igor Sechin
The heads of Western oil majors like BP (ticker: BP) and Total (ticker: TOT) are expected to attend the conference later this week despite deteriorating relationships between Western governments and the Kremlin over Russia’s actions in Ukraine. President of Total’s Executive Committee Patrick Pouyanne and BP Group Chief Executive Bob Dudley are both expected to speak at a panel with Igor Sechin, CEO of Rosneft, while Shell (ticker: RDSA) CEO Ben Van Beurden will share the stage with the head of Gazprom, Alexei Miller, during the conference.
“Business is business. Political differences do not strongly affect serious business,” said Poltavchenko in a statement that echoed the heads of both BP and Total. “We stay out of the politics,” said Dudley to CNBC. “We have a lot of experience in Russia … our commitment is to remain.”
Pouyanne has also been quoted as saying Total plans to stay in Russia despite sanctions. “In my philosophy,” he said, “if you begin to rush out of a country each time you have a difficulty, the people will remember you are not faithful.”
BP and Rosneft expected to announce $700 million deal in St. Petersburg, as others look to unlock value
BP and Rosneft are expected to announce the close of a $700 million deal for a 20% stake in Rosneft’s Taas-Yuriakh Siberian oilfield during the conference, reports Russia Today. European sanctions are less restrictive than the regime put in place by the U.S., making it possible for companies like BP to continue working with their Russian partners.
“European companies are finding ways and are certainly freer to do business than their U.S. counterparts… U.S. companies are going to be hugely disadvantaged as we go forward because E.U. sanctions are not retroactive and U.S. ones are,” said James Henderson, senior fellow at the Oxford Institute for Energy Studies.
Source: Rosneft Komsomolsk Refinery
BP is a major stakeholder in Russia’s Rosneft, with shares that constitute 19.75% of Rosneft’s registered capital, according to the company’s shareholder structure. As part of the nearly 20% ownership, BP’s Dudley also sits on the board of Rosneft.
Norway’s Statoil (ticker: STO) is expected to drill two wells with Rosneft onshore in the Siberian North Komsomolskoye field this summer while Italy’s Eni (ticker: E) will likely continue work on its Black Sea license, reported Russia Today.
Shell hopes to boost capacity from its $20 billion Sakhalin plant in eastern Russia by a third, while Total continues to look for ways to unlock investments into the $30 billion Yamal gas plant, reports Reuters.
