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Germany’s Wintershall Dea, one of the main investors in the Nord Stream 2 gas pipeline, has decided to fully exit Russia in response to Moscow’s invasion of Ukraine.
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Wintershall Dea is a joint venture between chemicals giant BASF (72.7%) and Russian billionaire Mikhail Fridman’s investment firm LetterOne (27.3%).
The decision to deconsolidate Russian operations from financial reporting will result in Wintershall Dea’s parent company BASF booking impairments worth €7.3bn ($7.9bn), of which €5.4bn will be in the fourth quarter of 2022.
BASF noted that it may post a net loss of €1.4bn for the year 2022, compared with a net profit of €5.5bn the year before.
The firm said the exit process from Russian operations would be carried out in compliance with local laws and regulation.
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By GlobalDataUpon completion of the deconsolidation, Wintershall Dea will not report financial or operational key performance indicators (KPI), including production and reserves, of the Russian joint ventures in its group financial statements.
Wintershall Dea CEO Mario Mehren: “Wintershall Dea will end its Russian activities. Continuing to operate in Russia is not tenable. Russia’s war of aggression in Ukraine is incompatible with our values and has destroyed co-operation between Russia and Europe.
“In recent months, limitations imposed by the Russian Government on operations of Western companies in the country and external interferences in our joint venture operations, made it impossible for Wintershall Dea to operate in Russia as before and resulted in an economic expropriation of the joint ventures in Russia.”
In Russia, Wintershall Dea owns a 35% stake in the Yuzhno-Russkoye gas field, with partners Gazprom and Austria’s OMV.
Wintershall Dea also owns stakes in two Achimov natural gas production projects in Siberia.
