“Now we are facing a stagnant demand both for oil and gas globally. These two commodities are providing 70% of Russian export and 50% of Russian federal budget revenues, so you can imagine how painful that is.”

Europe’s biggest oil groups are extending business deals with their Russian energy partners despite this month’s EU vote to continue imposing sanctions, highlighting how western companies are learning to live with the restrictions placed on Moscow.

Gazprom revived its contract with Italian contractor Saipem (controlled by state-run Eni SpA). The Milan-based company had signed two contracts worth €2.4 bn in total for the construction of an undersea pipeline and support services for construction of a second undersea pipeline, both part of much touted South Stream. The contract terms are now being renegotiated, so as to start construction in time for the 2016 deadline.

Europe may face deficit of gas imports of a total of 50 bln cubic meters in 2025, Gazprom Deputy Chairman Alexander Medvedev said Monday.

Slovakian Prime Minister Robert Fico met with Russian Prime Minister Dmitry Medvedev in Moscow and proposed a plan that would transfer gas from the Turkish border through Bulgaria, Romania, Hungary and Slovakia, thereby bypassing Greece.

Falling oil prices have resulted in much lower gas prices in many parts of the word. As a result, gas demand is enjoying the tailwind of substantial price drops while the upstream sector is suffering amid large capital expenditure cuts.

Russia is still likely to be Europe's biggest supplier of gas. Volume-wise, no one will be able to compete with Russia in Europe, at least for the next two decades.

The volume of gas supply via the western route might be boosted to 60 and to 100 billion cubic meters of gas a year.

Wintershall will continue investing in its core regions, with Russia remaining the most important area for the company.

China started construction last week of a pipeline to receive Russian gas, Russian state gas company Gazprom said on Tuesday.