Shell Says Russian Sanctions Minimize Restraints on Gas

Royal Dutch Shell Plc (RDSA) Chief Executive Officer Ben van Beurden said the latest sanctions against Russia mostly target the oil industry and appear to be designed to avoid restricting natural gas exports.

“It talks about predominantly oil-related technology,” van Beurden told reporters today on a conference call. “It looks as if it very much tries to avoid hitting gas exports. There may be some implications of course from the financial sanctions.”

Shell, Europe’s biggest oil company, is working with Russia’s OAO Gazprom on the expansion of the Sakhalin 2 liquefied natural gas project in the country’s Far East. On July 29, the European Union agreed to restrict the export of equipment to modernize Russia’s oil industry, a key prop for world’s largest energy-producing economy.

The Anglo-Dutch company, which Deutsche Bank AG estimates has about $6.7 billion of oil and gas-producing assets in Russia, is also exploring for oil with OAO Gazprom Neft in Siberia.

Shell “is monitoring” the situation, “but it’s a bit early to say how this all play out and what the precise consequences for us will be and what sort of postpones we will have to have,” the CEO said. “I guess it will go on for a little while before this will settle down.”

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Alex Devine, Tony Barrett

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