Acasă » General Interest » Western firms head for the exit in Russia as sanctions tighten

Western firms head for the exit in Russia as sanctions tighten

28 February 2022
Economics&Markets
energynomics

Energy giant BP, global bank HSBC and the world’s biggest aircraft leasing firm AerCap joined a growing list of companies looking to exit Russia on Monday, as Western sanctions tightened the screws on Moscow over its invasion of Ukraine.

The West has sought to punish Russia with a raft of measures, including closing airspace to Russian aircraft, shutting out some Russian banks from the SWIFT global financial network and restricting Moscow’s ability to deploy its $630 billion foreign reserves, according to Reuters.

Russia’s economy was already reeling on Monday. The rouble plunged as much as 30% to an all-time low, while the central bank doubled its key interest rate to 20%, kept stock markets and derivative markets closed and temporarily banned brokers from selling securities held by foreigners.

BP , Russia’s biggest foreign investor, abruptly announced at the weekend that it was abandoning its 20% stake in state-controlled Rosneft (ROSN.MM) at a cost of up to $25 billion, cutting the British firm’s oil and gas reserves in half and reducing BP’s production by a third.

BP’s decision, following talks with the British government, shone a spotlight on other Western firms with stakes in Russian oil and gas projects, such as U.S. firm ExxonMobil (XOM.N), France’s TotalEnergies (TTEF.PA) and Britain’s Shell (SHEL.L).

Equinor (EQNR.OL), the energy firm majority owned by the Norwegian state, said it would start divesting its joint ventures in Russia, although a spokesperson added: “It will take some time to untangle a business developed over decades.”

Norway’s sovereign wealth fund, the world’s largest, will also divest its Russian assets, worth about $2.8 billion, while Australia’s sovereign wealth fund said it planned to wind down its exposure to Russian-listed companies.

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