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For Western Oil Companies, Expanding in Russia Is a Dance Around Sanctions

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Royal Dutch Shell Plc Chief Executive bows to President Putin during a meeting in Moscow April 2014: Maxim Shipenkov/European Pressphoto Agency

Extracts from a New York Times article by ANDREW E. KRAMER and STANLEY REED published in print 10 June 2014

Despite the push by Western governments to isolate Moscow for its aggression in Ukraine, energy giants are deepening their relationships with companies here by striking deals and plowing more money into the country. Royal Dutch Shell’s chief executive, Ben van Beurden, met with Mr. Putin in April and told him, “Now is the time to expand,” referring to a liquefied natural gas plant project. The companies are taking a calculated risk, given the threat of further sanctions. The risk for energy companies is that the next stage of sanctions, called the third phase, will be broader, cutting off dealings with major sectors of the economy like finance, metals and energy. The United States and its allies proposed such sanctions at a Group of 7 summit meeting in Brussels last week, to be carried out if the violence in Ukraine did not subside within a month.

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