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Foreign companies, including energy firms, which are ditching Russia will be considered pushing their Russian subsidiaries to “deliberate bankruptcy,” which under Russian law includes criminal prosecution for top managers, Upstream reported on Friday, quoting Russian Deputy Prime Minister Andrey Belousov.
Under Russian law, deliberate bankruptcy resulting in damages of over 1.5 million Russian rubles ($13,300 as of March 4) carries a criminal liability.
The companies leaving Russia will get fast-track bankruptcy protection, or they transfer their stakes to local managers until they return to Russia, according to a Reuters summary of Belousov’s latest comments.
Many international companies, including oil majors, have announced they would end their involvement in Russian projects and Russian companies in recent days over the Russian invasion of Ukraine.
BP was the first to announce it would divest from Russia. In just a few days, many other Western oil majors followed suit.
BP said on Sunday that it would divest its 20-percent stake in Russian giant Rosneft. BP chief executive Bernard Looney resigned from the board of Rosneft with immediate effect. The other Rosneft director nominated by BP, former BP CEO Bob Dudley, also resigned from the board.
A day after BP, Shell also said it would exit its equity partnerships with Gazprom entities, including the Nord Stream 2 gas pipeline project, its 27.5 percent stake in the Sakhalin-II LNG facility, its 50 percent stake in the Salym Petroleum Development, and the Gydan energy venture. Norway’s Equinor also decided to stop new investments into Russia and begin the process of exiting its Russian joint ventures. ExxonMobil discontinues operations at Sakhalin-1 and will make no new investments in Russia, the U.S. supermajor said this week, deploring “Russia’s military action.”
Glencore is reviewing all business activities in Russia, including stakes in En+ and Rosneft, and said it has no operational footprint in Russia, while its trading exposure is not material for Glencore.
Trafigura immediately froze investments in Russia and is reviewing the options in respect of its passive shareholding in Vostok Oil in which it has no operational or managerial input.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com