Norwegian energy group Equinor (EQNR.OL) said on Monday 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. read more
“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.”
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 (ROSN.MM). 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 (boepd), 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 boepd and the larger investments in Russia held by BP, Shell (SHEL.L), and France’s TotalEnergies (TTEF.PA).
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 Sunday, the Norwegian government announced that its sovereign wealth fund, the world’s largest, wwould divest its Russian assets, worth around 25 billion Norwegian crowns ($2.80 billion).