There is a race to get oil and gas companies in Russia. Over the past 24 hours, three major international oil companies have publicly announced they will get out of the Russian oil business. In what is perhaps the most significant move, oil giant BP said Sunday that it would cut ties with Russia's national oil and gas company. One of the largest shareholders is the company, with a stake in it worth over $13 billion. Robert Dudley will step down from the board. He was on a panel with the Russian president that he later called a "privilege." The oil company has been in Russia for 30 years. Half of the company's oil and gas production is accounted for by Rosneft. Thanks to its decision to sell off its fossil fuel holdings, the company will take a $25 billion hit. The company hasn't said how it will fund the transition. Even though there is a lot of fossil fuel under their control in Russia, they will not have an impact on their net zero goals. The aggressive net zero goal that was set in 2020 had a huge loophole in that it didn't include emissions from the Russian company. I have been shocked and sad by the situation in Ukraine, and my heart goes out to everyone affected.
Norwegian national energy company Equinor said Sunday it would also cut off all its ties with Russia's largest oil company. Equinor has a much smaller stake in Russia than the other company, but it still produces about 25,000 barrels of oil per day. On Monday, Shell joined in the fun, announcing it would cut ties with various projects in Russia that have around $3 billion in assets.
Given Russia's influence on the international oil and gas stage and the recent focus on Germany's decision to stall the Nord Stream 2 project, sanctions-based action against the country's fossil fuel industry has thus far beenlukewarm. The Biden administration did not place sanctions against big players in Russia's energy space. The lobbying arm of the oil and gas industry, the American Petroleum Institute, sees the war as benefiting the American oil and gas industry. A series of graphics with some of its key policy asks, including releasing permits to drill on federal lands and decreasing regulations, were posted in a thread just hours before Russia went to war.
They're right to be concerned about their dirty members, because other oil majors still have deep ties in Russia. ExxonMobil has 888-492-0 888-492-0 888-492-0 888-492-0's ties in Russia that amount to around $4 billion. The region has investments from other international companies. We will see if they decide to find a way out or not.
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