BASF Takes €7.3 Billion Writedown Due to Wintershall Dea’s Russia Exit

German multinational chemicals giant BASF will take a €7.3 billion writedown as a result of its energy unit Wintershall Dea exiting Russia, triggering a net loss for 2022. Wintershall Dea has been deeply involved in Russian energy sector, with stakes in the Nord Stream pipelines and joint ventures with Russia’s Gazprom. Wintershall Dea CEO Mehren said limitations imposed by Moscow on Western-owned assets had made operating in the country impossible, and resulted in an expropriation of joint ventures in Russia. The company pointed out that Russian presidential decrees had retroactively slashed the prices at which joint ventures can sell their oil and gas to state-controlled Gazprom.

“Continuing to operate in Russia is not tenable,” Mehren said.

“Russia’s war of aggression in Ukraine is incompatible with our values and has destroyed cooperation between Russia and Europe,” he added in a statement on Tuesday.

Most other Western energy firms have already left Russia and had been quicker to face losses. BP last May took a $24 billion writedown from its exit, while TotalEnergies in October took and impairment of $3.1 billion on top of an earlier $7.6 billion provision.

BASF’s write-down comes almost a year after Russia invaded Ukraine, triggering sweeping Western sanctions and an exodus of Western firms from Russia.

The energy company had previously said it was trying to legally separate its Russian business.

According to BASF’s statement, €5.4 billion of the writedown for 2022 were new charges to be taken in the fourth quarter.

Wintershall Dea said it had to write off Russian joint venture stakes and Russian-related activities, including its 15.5% holding in the damaged Nord Stream pipeline and the WIGA Transport joint venture with Sefe, formerly known as Gazprom Germania.

As a result, BASF flagged a €1.38 billion net loss for 2022, after a €5.52 billion profit in 2021. The company had been expected to make a net profit of €4.77 billion.

Wintershall Dea’s Russian activities include a 35% stake in the Yuzhno-Russkoye gas field, in which Gazprom had 40% and Austria’s OMV had 25% stakes.

The company also co-owns two Achimov natural gas production projects in Siberia, including a 50% stake in the Achimgaz joint venture with Gazprom and a 25% holding in the Achim Development venture.

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Do you need to access special insights on this matter?

Start your 7-day free trial  and become a member today

Subscribe to Top Insights Today

Subscribe to Executive Newsletter Top Insights Today

The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights

Join the ranks of global executives and subscribe to Top Insights Today

Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Nigeria, Niger, Algeria Set to Revive Trans-Saharan Gas Pipeline Project

Nigeria, Niger and Algeria signed a memorandum of understanding (MoU) to build a natural gas pipeline that would go through the Sahara Desert, Algeria’s Energy Minister Arkab announced on Thursday. The three countries have already agreed in June to resume plans on the decades old project, which presents an opportunity for Europe to diversify its natural gas supplies away from Russia.  

Israel’s First Ever Crude Oil Shipment Heading to Europe

Israel has exported for the first time ever crude oil material, with shipment heading for Europe from the country’s offshore Karish gas field, its London-based operator Energean said. In a statement Tuesday, Energean said “the first ever lifting of an Israeli crude oil cargo has taken place at the company’s Karish field, and a cargo ship of hydrocarbon gas liquids (HGLs) extracted from natural gas (and then used in a mixture to make crude oil) was exported to global markets for the first time in the history of Israeli oil and gas production.”

Switzerland Might Stay Neutral No More

In an unprecedented move, the President of Switzerland Cassis said during a TV interview it was very probable that Switzerland would follow the European Union to sanction Russia and freeze Russian assets in the country. Cassis said the Federal Council will meet on Monday and review recommendations from the Ministries of Finance and Economy. 

Stay informed

error: This content is protected !!