Norwegian oil and gas producer Equinor is quitting its joint ventures in Russia and will halt new investment there, just a day after BP announced it was cutting ties with the country following the invasion of Ukraine.
Equinor is two-thirds owned by the Norwegian government and has a strategic partnership with Russian state oil group Rosneft which includes projects across Siberia.
Equinor said it plans to take business-related writedowns. The group’s move is part of a concerted effort by Western governments to isolate the Russian economy. The Norwegian government on Sunday ordered its $1.3 billion oil fund, the world’s largest sovereign wealth fund, to drop its $3 billion in Russian investments.
BP announced on Sunday that it was selling its nearly 20% stake in Rosneft, the Russian oil company that took over most of the business from rival group Yukos after President Vladimir Putin’s crackdown.
Anders Opedal, chief executive of Equinor, said Monday morning: “In the current situation, we consider our position to be untenable. We will now stop new investments in our Russian business and we will begin the process of exiting our joint ventures in a way that is consistent with our values.
He added that Equinor was “deeply troubled” by Russia’s invasion of Ukraine and would “help fund the humanitarian effort in the region.”
Equinor, which has been in Russia for more than 30 years, strengthened its partnership with Rosneft in 2020, paying $550 million to acquire a 49% stake in a dozen exploration and production licenses in eastern Siberia. Some analysts criticized the move at the time for expanding into Russia after its annexation of Crimea in 2014 and investing in high-carbon fields.
Equinor’s current production in Russia is modest at just 25,000 barrels of oil equivalent per day compared to a total of around 2 million barrels per day for its group. It has 70 employees in Russia.