Norwegian energy group Equinor said on Feb. 28 it will start the process of divesting from its joint ventures in Russia amid Moscow's invasion of Ukraine.
Equinor is the second major European oil and gas producer, after energy major BP, to announce its exit from Russia as Western countries ramp up efforts to punish Russia with new sanctions.
"In the current situation, we regard our position as untenable," Equinor Chief Executive Anders Opedal said in a statement. "We will now stop new investments into our Russian business, and we will start the process of exiting our joint ventures in a manner that is consistent with our values."
RELATED:
BP Quits Russia in up to $25 Billion Hit after Ukraine Invasion
The company, which is majority owned by the Norwegian state, has been present in Russia for over 30 years, and in 2012 agreed strategic cooperation with Russia's Rosneft. Those plans were scaled down due to Western sanctions imposed on Moscow for Russia's annexation of Crimea from Ukraine in 2014, but Equinor remained a partner in several joint ventures.
Equinor's cooperation with Rosneft includes the heavy oil and gas field North Komsomolskoye in West Siberia and the North Danilovsky development in Eastern Siberia.
Equinor's petroleum production in Russia stood at 25,000 barrels of oil equivalent per day (bbl/d), and the company has 70 employees in Russia, according to its website. That exposure is relatively small compared to Equinor's total production of around 2 million bbl/d and the larger investments in Russia held by BP, Shell and France's TotalEnergies.
Equinor's non-current assets in Russia were valued at $1.2 billion at the end of 2021, and the company expects the divestment to result in impairments.
"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," Opedal said.
On Feb. 27, the Norwegian government announced that its sovereign wealth fund, the world's largest, would divest its Russian assets, worth around 25 billion Norwegian crowns (US$2.80 billion).
Recommended Reading
Vitesse Energy to Buy Bakken Pureplay Lucero in $220MM Deal
2024-12-16 - Vitesse Energy will acquire Lucero Energy’s Bakken/Three Forks assets, including 25 net remaining locations, 1.9 net DUCs and 20 wells that are candidates for recompletions.
Battalion Oil Walks Away from Fury Resources Buyout
2024-12-20 - The Battalion Oil-Fury Resources merger had been in discussions for more than a year, but Battalion said Fury failed to meet financial deadlines to continue the talks.
Diamondback Acquires Permian’s Double Eagle IV for $4.1B
2025-02-18 - Diamondback Energy has agreed to acquire EnCap Investments-backed Double Eagle IV for approximately 6.9 million shares of Diamondback and $3 billion in cash.
Ring Energy Bolts On Lime Rock’s Central Basin Assets for $100MM
2025-02-26 - Ring Energy Inc. is bolting on Lime Rock Resources IV LP’s Central Basin Platform assets for $100 million.
Elliott Demands Phillips 66 Sell or Spin Off Midstream Biz for $40B+
2025-02-12 - Activist investor Elliott Capital Management disclosed Feb. 11 it has built a $2.5 billion position in Phillips 66 and issued a series of initiatives, including the sale or spinning off of the company’s midstream assets.