ARKHANGELSK, March 30. /TASS/. Russia’s oil and gas industry is developing successfully in spite of the Western sanctions, BP Russia President David Campbell said in an interview with TASS at the International Forum "Arctic - Territory of Dialogue" in Arkhangelsk.

BP, which holds almost 20% in Russia’s largest oil company Rosneft, plans to continue making investments in the country, Campbell said.

"We have worked with many sanctioned regimes all of the world and for many years. As long as we comply with these sanctions, we can still work, we still intend to work. I am very confident that within the sanction regime, in areas we were committed to work we will invest. There have been some changes but the industry, as it always does, accommodates to those changes. The Russian production has grown through this period, activity has increased driven partly by reduced ruble and the costs of projects have reduced. So within the rules we always work as we can," he said.

Earlier the EU’s General Court declared that the sanctions Brussels had imposed against several Russian companies including Rosneft due to the situation in Ukraine are grounded. This decision may become a foundation for handing down a similar verdict on the lawsuit Rosneft filed to the High Court in London. It also sets a precedent on verdicts to lawsuits by other Russian companies.

Rosneft disputed the sanctions that were imposed in 2014 against the oil sector and restricted the supplies of goods and services required for conducting deep-water explorations in Russia’s Arctic region. The sanctions also limited financing prospects and hampered stock trades of several Russian companies including Rosneft. Similar measures were imposed by the US.

Campbell said that "there are certain types of projects that are captured by the sanctions and prevent from working." Working in some areas is impossible until restrictions are removed.

"There are financial sanctions, which restrict borrowing. But we have seen some changes there. We have seen more investments from the East, more borrowing from Russian banks and less from foreign banks," he said.

Gas prospects

Campbell did not rule out that the activities of BP in Russia can be expanded through gas projects. He mentioned that in 2017, BP plans to launch seven new start-ups in different parts of the world and 6 of them are gas projects. Increasing the share of the gas projects in the portfolio of BP assets is an important component of the company’s strategy, the oil executive explained.

"Russia is one of the world’s great gas producing countries. You asked about sanctions - well sanctions generally have avoided gas (sector). So I don’t expect it to be a problem. We will of course apply for licenses. I am quite positive about Russia playing a part with BP and Rosneft in BP’s move towards gas future," he stated.

The head of BP in Russia stressed that the company’s strategy of operating in the country is tied in with Rosneft.

"Remember, we own almost 20% of Rosneft and Rosneft got many projects. Our strategy is to work with our partner Rosneft. It is such a great company and it has many opportunities," he said.

At the same time the top manager did not show interest in projects on alternative energy sources in Russia.

"Alternative energies are important to us. We have been working in this area for a couple of decades. We have a very big business in the US and we have a big business (bio fuels) in Brazil. I don’t see that to be such a focus for us in Russia just because in Russia has wonderful endowment in terms of oil and gas," he said.

Campbell did not rule out that changes in the national tax system may contribute to development of projects on renewable energy in Russia.

"Of course it will help. We look at investment opportunities in every country we work. For the moment I think that is more difficult to compete (in alternative energy sector - TASS) than in other areas," he said.

Europe funded the development of alternative energy sources for quite a long time, they began to cut funding only after the oil price decreased.

Russia’s competitiveness

Campbell reiterated that over the last 3 years since oil prices had dropped a number of investment projects was canceled. "As the oil prices have increased recently, as a result of the OPEC-Russia deal, investments have stated to increase a little bit. But it will take several years before the effect of that investment turns out as production," he said.

Campbell noted that as head of BP Russia he has to defend and promote projects in this country against projects in other countries.

"We have a limited amount of capital and we want to spend it on the most attractive projects.

BP considers Russia to be an attractive region for investments.

"I think, Russia has some very attractive projects, a very low costs, a very generous geological endowment - the resources are there, a very experience government, lots of experienced people. It has many advantages," the BP official said.

When asked if the Russian projects are more attractive than shale oil production in the US, he said:

"The competition will go on forever. But Russia should be confident because of so much onshore low cost recourse to produce," the top executive emphasized.

Campbell noted that in the area of taxation the situation is not quite clear.

"I think in terms of geology Russia has some similar opportunities and we are interested in some of those working together with Rosneft. In terms of governance - it has good governance. In terms of taxation it is not as advantageous as in America - the taxes are lower and that is why I think they have this boom because oil companies can keep more of the profit," he said.

The President of BP in Russia did not rule out an upsurge of new oil and gas projects in Russia amid the recovery of oil prices.

"I think it can be. I am very interested in geology. I am very confident in the government and its management of the industry. And all the technologies that are required exist in Russia. So, yes - I am quite confident it can work," he said.