Norwegian Oil And Gas Major Equinor To Exit From Russia After 30 Years Of Operation, Says Decision Despite Adverse Business Impact

Norwegian energy major Equinor said it will start the process of exiting the company’s joint-ventures in Russia

The company said in a statement today (Feb 28) that in addition to exiting its operations in Russia, it “has decided to stop new investments" into the country.

“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 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,” Opedal added.

"We expect that the decision to start the process of exiting Joint Ventures in Russia will impact the book value of Equinor’s Russian assets and lead to impairments." the company statement said

Equinor has been in Russia for over 30 years and entered a cooperation agreement with Russia's state-owned Rosneft in 2012. The company’s net production in Russia stood at 25,000 barrels of oil equivalent per day, and the company has 70 employees in Russia

Since1996, the company has been a partner in the Kharyaga oil field development in the Timan-Pechora basin located in the Nenets Autonomous District 60 kilometres north of the Arctic Circle.

In 2012, Equinor entered into a strategic cooperation with Rosneft. The projects by the joint venture including the North Komsomolskoye oil field development project in West Siberia, a pilot exploration programme to assess the potential for commercial production from the Domanik limestone formation in the Samara region, and 12 exploration and production licences in Eastern Siberia.

At the end of 2021, Equinor had $1.2 billion in non-current assets in Russia, it said.

Equinor is the second European oil and gas producer to exit Russia after British energy behemoth BP announced its exit on Sunday (Feb 27).

The decision of BP to completely exit the Rosneft holding will result in charges of up to $25 billion at the end of the first quarter.

BP said it will take two non-cash charges in the first quarter to reflect the change, including an USD 11 billion charge for foreign exchange losses that have accumulated since 2013.