Italian oil major Eni SpA (NYSE: E) has no plans to pull out of its joint venture (JV) with Russia's Rosneft despite escalating sanctions against Russia, the head of Eni said April 18.
"We certainly have not pulled out, we're working with them," CEO Claudio Descalzi said on the sidelines of a conference.
Eni, one of Europe's biggest importers of Russian gas, extended a cooperation agreement with Rosneft last year to explore the Russian Barents Sea and the Black Sea, and to consider further opportunities together.
But after the U.S. imposed major new sanctions against Russia earlier this month, speculation has been growing that companies working with Rosneft might have to reconsider deals.
"We need to see why more sanctions have been imposed and how they will be applied, but it's not that we've closed relations with Rosneft, we are here and will remain here," Descalzi said.
Last month, a source close to the operations said Rosneft and Eni had failed to make a commercial oil discovery in the Black Sea as the well they were drilling turned out to be dry.
Descalzi, who acknowledged Eni and Rosneft had not found much in the Black Sea well, said the two companies were now looking further north and would be moving to drill wells in the Russian Barents Sea.
Eni buys almost 21 billion cubic meters of gas per year from Russia covering 29% of gas supplies to Italy.
"It's strategic for the energy security of Italy," Descalzi said.
Environmental groups filed to block the executive order. Appeal considered likely.
As a major supplier of oil and gas to Europe and starting point for migrant flows into Italy, much is at stake if the country slips into further turmoil.
A U.S. appeals court on March 28 supported a lower court’s finding that Italian oil producer Eni SpA breached a contract with offshore drilling contractor Transocean Ltd., but voided a $160 million damages award.