Major energy companies’ exit from Russia to cause significant technological voids

Oil&Gas Materials 28 March 2022 12:25 (UTC +04:00)
Major energy companies’ exit from Russia to cause significant technological voids
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, March 28. The decision of major oil and gas companies to leave Russia will cause significant technological voids that could be hard for other Russian companies to fill, Trend reports with reference to GlobalData.

The company notes that Russia’s oil and gas sector depends heavily on the technologies of Western countries, especially for its hard-to-recover oil and offshore projects.

“Europe is also the major market for Russia’s oil and natural gas exports and its main source for revenue. The region accounted for nearly half of Russia’s total oil and natural gas exports in 2021, while the US contributed to 4 percent of its crude oil exports,” GlobalData estimates.

bp announced that it plans to divest its 19.7 percent stake in Rosneft—a move which is expected to cost the company $25 billion. The company will also exit its three joint ventures in Russia, with a carrying value of $1.4 billion at the end of 2021.

Shell intends to exit its partnerships with Gazprom and associated entities—including its 27.5 percent stake in the Sakhalin-II, a major liquefied natural gas (LNG) facility. It also plans to divest its 50 percent stake in the Salym Petroleum Development NV, and the Gydan, its joint ventures with Gazprom Neft in Western Siberia. The company has withdrawn from the Nord Stream 2 gas pipeline project, and it has now come to a halt.

ExxonMobil announced its decision to suspend its operations in Russia and divest its 30 percent stake in the Sakhalin-1 venture. It also decided not to make new investments in the country.

Equinor halted new investments into its business in Russia and began the process of exiting from its joint ventures. The company had $1.2 billion in non-current assets in Russia at the end of 2021.

OMV decided not to pursue any future investments in the country amid the ongoing crisis. The company intends to review its 24.99 percent interest in Yuzhno Russkoye, which comprises all options including possibilities to divest or exit.

TotalEnergies has decided not to provide capital for new projects in Russia. The company holds a 19.4 percent interest in Novatek, a 20.02 percent interest in the Yamal LNG project—which Chinese banks are sponsoring—and a 10 percent interest in Arctic LNG 2, which is scheduled to start production in 2023.


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