MOSCOW: Asian companies will replace Western majors if they quit energy projects in Russia due to sanctions over Moscow’s role in Ukraine, Natural Resources Minister Sergei Donskoi said.

Donskoi told Reuters that Asian companies had signalled their interest as the United States targeted cooperation with Russia in exploring or producing oil from the Arctic offshore, deep water or shale projects. Those companies affected by the sanctions have until Sept. 26 to stop work.

“They (Asian companies) have showed their interest,” Donskoi said in an interview at the Reuters Russia Investment Summit.

“We have many companies, not only from the developed countries, but also from developing markets, which are ready to work with us,” the minister said.

“They have resources and, in some cases, technologies, which can be adapted and developed here. That’s why we have ways to solve the issues and problems related to sanctions.”

The remote and unconventional oil deposits are crucial for Russia’s goal of maintaining production of crude oil at about 10 million barrels per day and President Vladimir Putin has ordered companies to try to find ways of reducing Russia’s reliance on foreign companies for expertise in these areas.

But some analysts say that replacing those companies already involved in exploration would take years, delaying projects which Russia hopes will begin production in around 3-5 years.

On Friday, ExxonMobil said it would stop drilling in Russia’s Arctic but had received a short extension from the US Treasury Department to wind down a rig at the well beyond the 14 days outlined in the sanctions.

According to its partner — Russian state oil company Rosneft — Exxon was continuing exploration drilling on Saturday.

Donskoi said Russia had not changed its long-term plans on hard-to-recover oil and was discussing ways to support the exploration sector.

Published in Dawn, September 23rd , 2014