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Russia's Rosneft Scoffs at Sanctions to Sign Pirelli, Seadrill

Stocks in this article: XOMCMS

NEW YORK (The Deal) -- OAO Rosneft CEO Igor Sechin may have had his travel options crimped by U.S. sanctions linked to the Ukraine crisis, but the restrictions have had little effect on his globe-trotting dealmaking.

The head of Russia's biggest oil company signed off on more than 12 agreements over the last two days of the annual St Petersburg International Economic Forum, an ostensibly energy-focused get-together that closed on Saturday, May 24.

Amongst the flurry of signatures was that of BP's Russia President David Campbell, who signed off on a $300 million-plus investment in 49% of a new Russian shale gas joint venture with Rosneft.

Russia's biggest oil producer also secured a deal to buy an indirect 13% stake in Italian tire maker Pirelli for 553 million ($755 million); set out plans to buy a "significant stake" in North Atlantic Drilling Ltd., a unit of the world's largest offshore drilling company Seadrill; and tied up joint venture and supply deals with oil companies from Azerbaijan, Venezuela, Mongolia, India, Cuba and the United Arab Emirates.

The stream of deals is a blow to U.S. efforts to isolate Sechin and put pressure on Russia over its perceived support for pro-Russian separatists in eastern Ukraine. Sechin, a close political ally of President Vladimir Putin, was named on May 1 on a list of seven people and 17 entities to face U.S. sanctions following the unilateral referendum in Crimea about joining Russia.

U.S. hopes of pressuring Russia had already suffered a significant set back last week when Putin on May 21 secured a long-term agreement for OAO Gazprom to sell natural gas to China. Details of the deal were not released but it is thought to be worth about $400 billion over 30 years, significantly easing Russia's dependence on Western European gas markets.

Washington's sanctions led some banks, incuding Citigroup (C) and Morgan Stanley (MS) to stay away from the St Petersburg get-together. They were not, however, enough though to dissuade the heads of many oil companies. Amongst the attendees were BP CEO Bob Dudley, Royal Dutch Shell CEO Ben van Beurden, Neil Duffin, president of ExxonMobil (XOM)'s upstream subsidiary Exxon Mobil Development Co., Total CEO Christophe de Margerie and Eni CEO Paolo Scaroni.

The oil executives' stays in Moscow were often short, and many chose to keep a low profile.

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