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St. Petersburg — European oil majors including Shell and OMV signed new cooperation deals with Russian energy companies during the St. Petersburg International Economic Forum this week, in a sign that they were willing to make new investments despite risks of potential new sanctions.

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Since 2014 when the US and other Western countries introduced sanctions against Russia, Russian energy companies have operated with limited access to Western financing and some type of oil production technology.

This had made Western majors more cautious about signing up to new investments, with some companies winding down cooperation that could be in breach of sanctions.

Cooperation on conventional hydrocarbons projects continues to grow, however. Deals signed this week included Shell, Gazprom Neft and Spain's Repsol agreeing to jointly develop hydrocarbons projects in the Russian Arctic. This followed an agreement Thursday between Shell and Gazprom Neft to set up a West Siberian oil joint venture to develop fields with combined estimated reserves of more than 8 billion barrels.

Other deals included Austria's OMV agreeing to purchase terms for a stake in a gas project in northern Russia, as well as a preliminary LNG deal with Russian gas giant Gazprom.

There are also signs that Russian and Western companies are considering to increase cooperation in other countries.

Gazprom Neft CEO Alexander Dyukov said the company may work with Shell on projects abroad.

Meanwhile, Total and Siemens agreed to cooperate on an LNG project in Vietnam with Russia's Novatek and Zarubezhneft.

The CEOs of ExxonMobil and BP also took part in the forum, meeting with Russian officials and discussing cooperation with existing partners.

REDUCED SANCTIONS RISK

The deals come at a time when some analysts believe that the risk of new sanctions being introduced against Russia has receded.

"Targeted US sanctions against Russia remain possible, from issues ranging from Sergei Skripal, to Ukraine, to US election interference. However, the lack of major new revelations regarding Russia in the Mueller report reduces the odds of major sectoral sanctions targeting Russia's upstream energy production," Platts Analytics' Paul Sheldon said.

In the past, Russia's close relationship with Iran and Venezuela sparked speculation that the US administration's sanctions targeting those two countries could include secondary sanctions against Russian energy projects.

"Secondary sanctions related to Russian dealings with PDVSA or Iran, if announced or implemented, would be unlikely to target Russian upstream oil production at this point," Sheldon said.

Russian officials also used the forum as a platform to warn of the impact of sanctions. Energy minister Alexander Novak said that sanctions are leading to increased interest in establishing alternative payment systems and switching to trading in national currency.

A key concern among Russian officials is that future US sanctions against the country could restrict Russian companies' access to the US dollar. Since they first started testing the viability of using alternative currencies in the wake of sanctions in 2014, rising global trade tensions, most notably between the US and China, have made some of its major partners more receptive to non-dollar trade.

The importance of the US dollar in oil trading and the considerable additional forex risks associated with alternative currencies have lead most analysts to forecast that a major switch away from the dollar is unlikely in the near future.

-- Rosemary Griffin, rosemary.griffin@spglobal.com; Nadia Rodova, nadia.rodova@spglobal.com

-- Edited by Pankti Mehta, newsdesk@spglobal.com