NOVO-OGARYOVO, Russia (Reuters) - Royal Dutch Shell is committed to expansion in Russia, Chief Executive Ben van Beurden told Russian President Vladimir Putin at a meeting on Friday amid sanctions imposed on the country after its annexation of Ukraine’s Crimea region.
Shell plans to expand Russia’s only liquefied natural gas (LNG) plant with Russian partner Gazprom, he said at a meeting at Putin’s residence.
“We, of course, will pledge all the necessary administrative guidance and support,” Putin said in response in a meeting that was later broadcast on national television.
The United States and European Union have imposed targeted sanctions against a list of Russian and Ukrainian individuals and firms in retaliation for Moscow’s annexation of Crimea last month.
EU and U.S. diplomats have indicated that they may consider wider sanctions against whole sectors of the Russian economy if Russian forces were to enter Ukraine.
“We are very keen to grow our position in the Russian Federation,” van Beurden said. “We look forward with anticipation and confidence on a very long-term future here in Russia.”
BP boss Bob Dudley said this week the sanctions had not impacted the company’s business in Russia.
Shell already has an oil-producing project with Gazprom Neft, Gazprom’s oil arm, and they have started to tap hard-to-recover oil in Russia.
Van Beurden confirmed that Shell had agreed with Gazprom to expand the Sakhalin-2 LNG plant which produces 10 million tonnes of LNG per year.
Other shareholders include Japan’s Mitsui and Mitsubishi.
The expansion plan is in line with Putin’s demand to boost production of LNG and double Russia’s global market share to around 10 percent by 2020.
Earlier on Friday, Russian Energy Minister Alexander Novak said there was no sign of international oil and gas majors cutting investment.
The world’s top crude oil producer and a leader in natural gas, Russia has signed deals with international majors including ExxonMobil, Eni, Statoil and BP, mainly relating to projects in the Arctic.
Novak also said the 2,400-kilometre (1,490-mile) South Stream pipeline from Russia via the Black Sea to southern Europe, avoiding Ukraine, would proceed despite signs that the European Union may withdraw its support.
Reporting by Alexei Anishchuk and Anastasia Lyrchikova; Writing by Vladimir Soldatkin and Conor Humphries; editing by Jason Neely