Rosneft head calls for contracts to be honoured

Igor Sechin, the head of Russia’s state oil giant Rosneft, spoke out Monday against attempts to revisit business contracts as the Kremlin is locked in a bitter showdown with the West over Ukraine.

Sechin, one of President Vladimir Putin’s most trusted lieutenants, spoke as Moscow moved Monday to cut Ukraine’s gas supply, charging that Kiev had violated its contractual obligations by refusing to pay outstanding bills.

“The contract should be a sacred component, it should be applied,” said the Rosneft chief executive, who is among the Russian officials targeted by US punitive measures over the Ukraine crisis.

Speaking at a major petroleum conference in Moscow that has brought together leading energy companies, he added that “honouring the contracts should not be a method of applying political pressure”.

A number of Western firms are believed to be reviewing their commitments to Russia after Washington and Brussels slapped sanctions on the Kremlin and the local economy took a turn for the worse.

But energy chiefs and political titans who descended on Moscow for the World Petroleum Congress were expected to stress the West’s commitment to energy investments in Russia despite the Western sanctions.

Europe faced gas supply disruptions on Monday after Russia switched Ukraine to a prepayment system and said it was seeking to recover $4.5 billion from Kiev in an arbitration court.

Ukraine said Russia had reduced its gas shipments and was only sending enough to cover Europe’s fuel needs after the two sides failed to reach a compromise price deal.