Sanctions against Russia’s key energy companies would inevitably lead to a collapse of the European energy sector, BP CEO Bob Dudley has warned, according to Sputnik news agency.
“I do not think that would happen. If sanctions were put on Rosneft or Gazprom or LUKoil like what happened with Rusal, you would virtually shut down the energy systems of Europe, it is a bit of extreme thing to happen. We invest in Russia carefully, not just in Rosneft,” Dudley told the Oil & Money conference in London.
Russia is a key supplier of natural gas to Europe. State-run Gazprom, the world’s largest gas producer, caters for 40 percent of European energy needs. For geographical reasons, Russian supplies are by far the cheapest and safest for the continent.
However, Baltic states and Poland have said that Russia is using gas supplies as a political tool. Lithuania and Poland have been expanding their liquefied natural gas (LNG) infrastructure to receive shipments from the United States and Qatar. Gazprom executives have said that this increases gas prices for households.
Europe and Russia are also large partners in oil exports. US Energy Information Administration data says Russia exports more than 5.2 million barrels per day of crude oil and condensate, of which 70 percent goes to Europe. Outside of Europe, China is the largest recipient of Russia’s crude oil exports.
European imports of oil and gas have increased significantly in the last 10 years. Energy production on the continent has declined 15 percent in the last decade, according to the European statistics office Eurostat.