Germany’s Wintershall Dea and Austria’s OMV are being stripped of their multi-billion-dollar stakes in joint ventures developing natural gas projects in Russia under a decree by Vladimir Putin.
The Russian president has signed a decree ordering that the shares of the two Western energy companies in the Yuzhno-Russkoye field and in the Achimov projects in Russia’s Arctic be transferred to newly set up Russian firms. OMV and Germany’s BASF and its joint venture with LetterOne, Wintershall Dea, held minority stakes in the development of the Yuzhno-Russkoye field.
According to Putin’s decree, all corporate agreements that have been in force so far are no longer valid.
The move is part of Russia’s efforts to protect its national interests “amid the illegal and unfriendly actions of the West in relation to Russian assets,” according to the decree cited by Reuters.
Wintershall Dea is in the process of exiting Russian operations while OMV announced an exit last year.
Commenting on Putin’s latest decree, a spokesperson for Wintershall Dea told Reuters in a written response to questions that “The presidential decree is further confirmation: Russia is no longer a reliable economic partner and is unpredictable - in every respect.”
BASF told Reuters on Wednesday it learned of the order for asset seizures from the news and it was in the process of analyzing all the facts.
OMV and Wintershall Dea are not the first major Western oil and gas firms to have their Russian assets transferred to newly created Russian entities.Last year, a decree from Putin stipulated that a newly set up state Russian company would take over the rights and obligations of Sakhalin Energy Investment Co., the joint venture running the Sakhalin-2 oil and gas project.
Shell and Japan’s Mitsui and Mitsubishi were minority shareholders in Sakhalin Energy Investment Co, whose biggest shareholder is Gazprom. Shell had already announced it was pulling out of Russia due to the invasion of Ukraine before the decree was issued.
By Tsvetana Paraskova of OilPrice.com
