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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Oil Majors Face $44 Billion In Losses After Russia Exit

  • BP, Shell, and TotalEnergies collectively account for 40% of the total $110 billion losses after leaving Russia.
  • While higher oil and gas prices helped buffer these energy giants, other industries like carmakers and utilities also faced substantial financial setbacks from their Russian exit.
  • Despite hefty exits, over half of European businesses and some Japanese energy majors continue to operate in Russia for varied reasons, including energy security.
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The oil industry, including companies BP, Shell, and TotalEnergies, was the industry that suffered the greatest financial losses from leaving Russia, an analysis by the Financial Times has revealed.

Out of total losses of some 100 billion euro, or some $110 billion, the losses incurred by Big Oil majors account for about 40%. Next were utilities, which account for over 15% of the total losses.

BP last year booked an impairment cost of $24 billion on its Russian business after it left the country. The supermajor had a minority stake in Rosneft. The 19.75% interest accounted for around 50% of BP’s total oil and gas reserves and a third of its oil and gas production.

Shell reported a writedown of $5 billion on its exit from Russia last year but said that would not affect its oil and gas profits. It was one of the first companies to declare it would leave Russia after the Ukraine invasion.

TotalEnergies, on the other hand, was slow to exit. The French supermajor had a stake in an LNG project led by Novatek and, in late 2022, Total said it would drop it and leave, taking an impairment of $3.7 billion since it could not sell it back to Novatek because of the Western sanctions on Russia. Related: India’s Imports Of Saudi Crude Oil Plunge By 34%

Earlier in the year, TotalEnergies said it would incur an impairment of some $4.1 billion on its exit from Russia, to be booked in its first-quarter 2022 report. The biggest portion of that impairment came from the Arctic LNG 2 project of Novatek and the reduction in gas reserves TotalEnergies had to book with its pullout. According to FT calculations, TotalEnergies’ total cost of leaving Russia came in at $14.8 billion. 

Yet these were only the direct hits to the supermajors. The Financial Times studied their more recent financial reports to calculate the losses, meaning those impairment charges were just the start. The calculations also did not include the surge in oil and gas prices last year.

That surge certainly benefited oil and gas companies, somewhat cushioning the blow for BP, Shell, and TotalEnergies, but at the same time, it delivered a blow to all other companies that had already booked billions in losses from their pullout from Russia.

Meanwhile, BP, Shell, and Total booked the biggest individual writedowns on their Russian operations when they left because of the size of their exposure to the local oil and gas industry. Yet higher oil and gas prices more than made up for those impairments as the three booked a combined 95 billion euro in profits, equal to some $104 billion and more than twice as high as the combined impairment costs of around $40 billion.

Carmakers such as Volkswagen and Renault, as well as chemicals producers, also suffered hefty losses from their exit from Russia. But there are also some multinational majors such as Nestle and Unilever that remain in Russia. Banks, including Unicredit and Raiffeisen, also continue to operate in the country, although both have said they were looking for a buyer for their Russian businesses.

Utility companies such as Uniper and Wintershall Dea also lost billions from leaving Russia, with the total cost coming in at 14.7 billion euro, equal to about $16 billion.

Even so, more than half of European businesses that were operating in Russia prior to 2022 remain in the country, according to the Kiyv School of Economics, a research institute. Prior to 2022, these totaled 1,871 entities, according to the KSE data.


A couple of Japanese energy majors also remain in Russia despite G7 sanctions, to which Japan is a party. The government in Tokyo last year judged the stakes Japanese companies held in the Sakhalin-1 and Sakhalin-2 oil and gas projects as critical for the country’s energy security. As a result, the Japanese shareholders in these projects were offered to retain their stakes, which they did.

By Irina Slav for Oilprice.com 

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