Oil and gas deal pipeline relatively thin at this year’s St. Petersburg Economic Forum

There was a stronger showing of the heads of international oil and gas companies at this year’s St. Petersburg Economic Forum, but deals remained relatively light.

Companies continue to cut energy investment as oil prices remain well below their triple-digit highs from two years ago, and uncertainty surrounding sanctions against Russia cast a shadow on the deal pipe.

Gazprom (ticker: OGZPY) signed an exploratory deal with Royal Dutch Shell (ticker: RDSA) over Shell’s possible involvement in the Russian gas giant’s $10 billion gas export project from the Baltic Sea, while state-owned oil giant Rosneft (ticker: RNFTF) rubber-stamped a number of previously agreed deals with Italy’s Eni (ticker: E) and some Indian firms, reports Reuters.

The relatively small number of deals contrasted sharply with the billions of dollars of deals signed at the forum in years past. Companies are reducing the amount of money they throw into new projects as many continue to rebalance amid lower oil prices.

“The oil industry has dramatically reduced its investment,” Total (ticker: TOT) CEO Patrick Pouyanne told a panel with investors.

Sanctions remain a touchy topic, and are likely to continue

The drought of new deals comes as a setback for the Kremlin, which managed to lure back to the forum top executives from U.S. oil majors ExxonMobil (ticker: XOM) and Chevron (ticker: CVX), including Exxon’s CEO Rex Tillerson. Many Western executives skipped the forum last year following the implementation of sanctions against Russia for its actions in Ukraine, and the topic remains a difficult one.

“If there is a U.S. official in the audience, I’m happy to toss it over to them,” Tillerson said, when asked about the impact of sanctions on his investments in Russia.

Many companies continue to look for ways to work with Russia on its energy projects, however. Pouyanne, whose company has $27 billion invested in the Yamal LNG project, ran into several delays and obstacles while trying to secure financing.

“It was difficult … But we continue to invest in Russia despite sanctions … In Russia you can find some of the lowest cost resources in the world,” said Pouyanne.

Sanctions are expected to continue through at least the end of 2016, as well. The U.S. and E.U. implemented a sanctions regime against Russian companies and individuals with links to Moscow after Russia annexed Crimea from Ukraine in 2014. Next month, the E.U. will meet to decide whether to renew sanctions.

E.U. diplomats say sanctions may be softened but extended by six months, reports CNBC. The various members of the E.U. have differing opinions on the sanctions regime, with Baltic countries boarding Russia typically in favor of stricter sanctions, while countries like Greece have signaled possibly tailing them off.

Russian officials hope sanctions will end by 2017

“We expect sanctions to be lifted by the end of the year,” Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF) told CNBC in Russia at the St. Petersburg International Economic Forum.

“We don’t believe (they can be lifted) right away… (But) Russia cannot be ignored. Russia is a very important player,” he later added.

RDIF holds $10 billion of reserved capital under management, much of it focused on the Middle East and Asia. Dmitriev said the fund and Russian President Vladimir Putin wish to have strong investment relationships in Europe as well.

“We believe Russia needs to have a balanced position,” he said.

This more “balanced” position is a bit of a change for Russia, which began shifting investment and business deals east following the implementation of sanctions. Chinese banks have been less forthcoming with loans than many in Russia hoped, however.

Sanctions extended on Crimea

While the European Union may decide to loosen sanctions against Russia, the group of nations decided Friday to extend the ban on business dealings with Crimea. The sanctions, now prolonged until June 23, 2017, prohibit imports of products from Crimea, any investment in the Black Sea peninsula, cooperation in tourism services as well as exports of some goods and services.

The Russian perspective: future energy development depends on the U.S. presidential elections; U.S. uncertainty is increasing risk for the global economy

During the St. Petersburg Economic Forum, Rosneft CEO Igor Sechin argued that it was hard for the industry to assess prospects in Russia’s top two energy rivals – the United States and Saudi Arabia. Uncertainty around the U.S. presidential election, and Saudi Arabia’s proposed economic overhaul is seeping into the oil and gas industry as well, said Sechin.

Sechin said he thought if Republican Donald Trump wins the upcoming U.S. presidential election, conventional oil and gas producers would benefit. If Democrat Hillary Clinton wins, there was likely to be less support for fossil fuels and more support for green energy, he added.

“Given the role that the U.S. economy is playing globally, uncertainty over the development of the U.S. oil and gas industry is increasing the risks for the global economy,” Sechin said.

Saudi Arabia, on the other hand, has a painful transformation ahead if it goes through with reforms to make the kingdom less energy dependent. Saudi Arabia was only able to cut its deficit to $85 billion in 2016 from a record $100 billion the year before said Sechin.

Meanwhile, Russia’s investment potential continues to grow, the oil executive and close ally of President Putin said. More resources continue to be discovered in Russia and the steep ruble devaluation is helping cost-cutting for companies like Gazprom and Rosneft, which sell their products in dollars.

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