Gazprom looks to drop the dollar to avoid sanctions’ bite

The oil arm of Russia’s state-owned Gazprom is preparing customers to settle contracts in euros rather than dollars as it braces for the possible escalation of US sanctions against Moscow.

Alexander Dyukov, chief executive of Gazprom Neft, told reporters in St Petersburg that the company had discussed shifting contracts to euros with its customers. “Practically all – 95 per cent of our customers – confirmed their willingness to move to settlement in euros,” he said.

The discussions reflect the growing fear among larger Russian companies that they could soon come into the cross-hairs of US and European sanctions that have so far targeted wealthy individuals and a single mid-sized bank – Bank Rossiya.

One senior banker said that many commodity groups, including Gazprom Neft, had held talks with bankers about financing in euros rather than dollars. “Every commodity sector business is talking about what is possible if you couldn’t do deals in dollars – if you couldn’t get dollar clearing through New York,” he said.

http://www.ft.com/intl/cms/s/0/7c79f20a-be6e-11e3-b44a-00144feabdc0.html