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UPDATE 1-Russia's Rosneft says to honour agreements despite US sanctions
July 18, 2014 / 9:56 AM / 3 years ago

UPDATE 1-Russia's Rosneft says to honour agreements despite US sanctions

* Rosneft’s shares sharply down

* Company says to stick to dividend, strategy

* Says sufficient liquidity to service debts (Adds detail, quotes, share price)

MOSCOW, July 18 (Reuters) - Top Russian oil producer Rosneft said it would continue to work on existing projects and agreements and honour its obligations despite U.S. sanctions slapped on the company over Moscow’s role in the Ukraine crisis.

The United States earlier this week imposed new sanctions on Russian companies including Rosneft. Its shares fell by over 4 percent on Thursday and were down a further 1.5 percent by midday on Friday.

“Rosneft is a public company traded on Russian and international exchanges. Therefore, the sanctions inflict damage upon the company shareholders, including U.S. citizens and residents,” the company said in a statement on Friday.

It has a number of joint projects with international majors, including Exxon Mobil and Statoil, to tap Arctic offshore riches and hard-to-recover oil in Russia.

Rosneft, in which BP holds a 19.75 percent stake, also said it has sufficient liquidity to service its debts and that its financial position allows it to deliver on the key indicators of its strategy and dividend policy.

“The company is currently in the process of a legal review of the announced sanctions and is consulting its international partners,” Rosneft said.

Analysts have been concerned about Rosneft’s ability to attract funds as costs of borrowing have risen for Russian companies after Moscow annexed the Crimean peninsula from Ukraine in March.

The Kremlin-controlled company, headed by Igor Sechin, a long-standing ally of Russian President Vladimir Putin, said the sanctions were “illegitimate and groundless” as it has “no influence on either political or economic processes ongoing in Ukraine”.

Rosneft also is in the process of acquiring Morgan Stanley’s oil trading division. Morgan Stanley said it did not believe new U.S. sanctions on Rosneft would affect the pending deal between the two companies. (Reporting by Vladimir Soldatkin; editing by Jane Baird)

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