Certain oil, gas companies to shed Russian interests

March 7, 2022
Energy companies with oil and gas interests in Russia are looking for the exit following the Russian military attack on Ukraine.

Energy companies with oil and gas interests in Russia are looking for the exit following the Russian military attack on Ukraine.


bp will exit its 19.75% stake in Rosneft, and bp Chief Executive Officer Bernard Looney, along with former bp group chief executive Bob Dudley, have resigned from the Russian-owned entity following the invasion.

bp will write-down its $14 billion Rosneft stake to fair value and likely another $1.5 billion Russian assets and has reduced its 2025 EBITDA outlook by $2 billion as a result, while other components of its financial framework are unchanged, Cowen analysts said in a note Feb. 27.

The operator currently has interests in three joint ventures in Russia.

One, the Taas-Yuryakh JV in Eastern Siberia (20%), which is currently producing over 70,000 b/d. The deal to acquire stake in Taas was completed in November 2015. Production was expected to reach 100,000 b/d by 2021.

bp holds a 49% stake in Yermak Neftegaz LLC, formed in 2016, which is conducting onshore exploration in the West Siberian and Yenisey-Khatanga basins. Two areas of mutual interest cover a combined area of about 260,000 sq km.

The company also completed the deal to form a JV for the Kharampur project (49%)—a gas development project with existing mature oil production. The Cenomanian development is expected to allow production of over 10 billion cu m/year with potential for further development.

Timing, value, or interested parties were not mentioned in the bp release Feb. 27, but a sales process could be swift given political sensitivities, and Russian institutions or some in China or India could look into a deal, the analysts continued.

“Russia’s attack on Ukraine is an act of aggression which is having tragic consequences across the region. bp has operated in Russia for over 30 years, working with brilliant Russian colleagues,” said Helge Lund, bp chairman.

“The Rosneft holding is no longer aligned with bp’s business and strategy and it is now the board’s decision to exit bp’s shareholding in Rosneft,” he continued.


Equinor Energy said it will stop new investments into Russia and begin the process to exit its Russian joint ventures.

“We are all deeply troubled by the invasion of Ukraine, which represents a terrible setback for the world, and we are thinking of all those who are suffering because of the military action,” said Anders Opedal, Equinor president and chief executive officer, in a Feb. 28 release.

“In the current situation, we regard our position as untenable,” he continued. 

Equinor has been in Russia for over 30 years and entered a cooperation agreement with Rosneft in 2012. This cooperation covers projects including North Komsomolskoye oil field development in West Siberia, a pilot exploration program to assess commercial production potential from the Domanik limestone formation in the Samara region, and 12 exploration and production licenses in Eastern Siberia.

Equinor also has been a partner in Kharyaga oil field development in the Timan-Pechora basin in the Nenets Autonomous District since 1996.

At end 2021, Equinor had $1.2 billion in non-current assets in Russia. The company expects the exit to impact the book value of the operator’s Russian assets and lead to impairments.


Shell International BV (Shell) said Feb. 28 that it intends to exit equity partnerships held with Gazprom entities, including its 27.5% stake in Sakhalin-II LNG, its 50% stake in the Salym petroleum development in the Khanty Mansiysk Autonomous District of western Siberia, and the Gydan exploration venture in northwestern Siberia.

Shell also intends to end its involvement in the Nord Stream 2 pipeline project. Shell is one of five energy companies committed to provide financing the project. Germany stopped the certification process for the 55-billion cu m/year natural gas pipeline Feb. 22 following advances by Russian troops into eastern Ukraine. (OGJ Online, Feb. 22, 2022).

“Our decision to exit is one we take with conviction,” said Ben van Beurden, Shell’s chief executive officer.  “We cannot – and we will not – stand by,” he said, noting the company’s participation with various governments to “work through the detailed business implications, including the importance of secure energy supplies to Europe and other markets, in compliance with relevant sanctions.”

At end 2021, Shell had around $3 billion in non-current assets in these ventures in Russia. The company expects the exit will impact the book value of Shell’s Russia assets and lead to impairments.