After 30 years with oil-hungry eyes on Russia’s Arctic regions, the Norwegian oil major has decided to stop all new investments and start the process of exiting Russian joint ventures.
It was Monday morning Equinor’s Board of Directors announced the decision to leave Russia.
“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,” says Anders Opedal, President and CEO of Equinor in a statement.
The Norwegian oil company’s exit comes only hours after another oil major, the BP, said it is abandoning its stake in Rosneft, Russia’s largest oil company headed by Putin ally Igor Sechin.
Longtime interest in Russia
Equinor (then-Statoil) entered Russia in the 1990ties when it acquired stakes in the Kharyaga onshore oil field in the Nenets Autonomous Okrug. In 2012, the Norwegian oil company signed a strategic joint-venture cooperation with Rosneft.
In 2020 Equinor agreed with Rosneft to leave exploration commitments offshore in the Sea of Okhotsk in favor of a 49% interest in KrasGeoNaC, a production company holding 12 explorations on production licenses onshore in Eastern Siberia.
For years, Equinor (then-Statoil) was on everybody’s lips in Norway and on Russia’s Kola Peninsula for the plans to develop the huge Shtokman natural gas field in the eastern Barents Sea. The field holds almost 4 trillion cubic meters of natural gas and was considered among the biggest offshore structures in the world.
Together with Gazprom and Total, the Norwegian developers planned a massive production of LNG for processing at Teriberka north of Murmansk, as well as conventional gas for pipelines to Europe via mainland Russia.
The giant Shtokman plans were finally abolished in 2019.
“In the current situation, we regard our position as untenable. 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. Our top priority in this difficult situation is the safety and security of our people,” Anders Opedal says.
Equinor expects the decision to exit Russia will impact the value of the assets and lead to impairments.
By the end of 2021, the Norwegian oil major had non-current assets in Russia worth $1,2 billion.
Related stories from around the North:
Canada: Sweden, Finland pull out of Arctic360 conference in Toronto where Russian diplomats scheduled to attend, Eye on the Arctic
Finland: Finnish Army exercises inter-agency readiness, Eye on the Arctic
Norway: Coercive diplomacy is back, says Norwegian FM as Russia announces drills in Nordic country’s Economic Zone, Eye on the Arctic
Russia: Putin announces Sunday he’s put nuclear deterrence forces on alert on Kola Peninsula, The Independent Barents Observer
Sweden: Nordic military cooperation takes shape with common uniforms, The Independent Barents Observer