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Natural gas

Major Oil and Gas Companies Exit Russia Amid Ukraine Crisis

Strategic Insights

— 1 min read

Russia's oil and gas sector heavily depends on technologies from Western countries, particularly for hard-to-recover oil and offshore projects. Europe is the major market for Russia's oil and natural gas exports, accounting for nearly half of the country's total oil and natural gas exports in 2021. The crisis has prompted major oil and gas companies to reassess their presence in Russia, leading to suspensions and exits from the country.

Key Takeaways:

  • BP plans to divest its 19.7% stake in Rosneft, valued at $25 bn, and exit its three joint ventures in Russia, with a carrying value of $1.4 bn.
  • Shell intends to exit its partnerships with Gazprom, including its 27.5% stake in the Sakhalin-II LNG facility, and divest its 50% stake in the Salym Petroleum Development NV.
  • ExxonMobil decided to suspend its operations in Russia and divest its 30% stake in the Sakhalin-1 venture, valuing its operations in Russia at $4.1 bn.
  • Norwegian energy major Equinor halted new investments in Russia and began exiting from its joint ventures, with $1.2 bn in non-current assets in Russia at the end of 2021.
  • OMV decided not to pursue future investments in Russia, reviewing its 24.99% interest in Yuzhno Russkoye and expecting a total value adjustment of EUR1.5 bn to EUR1.8 bn.
  • TotalEnergies is continuing its operations in Russia, but has decided not to provide capital for new projects.

Statistics:

  • Russia's oil and gas sector accounted for nearly half of its total oil and natural gas exports in 2021, with Europe being the major market.
  • The US contributed 4% of Russia's crude oil exports in 2021.
  • BP's non-current assets in Russia from Shell's ventures were approximately $3 bn at the end of 2021.
  • ExxonMobil's operations in Russia were valued at $4.1 bn at the end of 2021.
  • Equinor had $1.2 bn in non-current assets in Russia at the end of 2021.
  • OMV expects a total value adjustment of EUR1.5 bn to EUR1.8 bn, including EUR987 M of unrecoverable receivables from Nord Stream 2 AG.

Sources:

  • Global Data, website: http://www.energy.globaldata.com, Copyright Global Data 2022.

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