Page 15 - FSUOGM Week 10 2022

FSUOGM PROJECTS & COMPANIES FSUOGM

Wintershall Dea cut off from Russian cash

flow amid war in Ukraine, sanctions

GERMANY GERMAN gas supplier Wintershall Dea has downgrade Wintershall’s ratings, given it is also
said it will not receive any revenues from its oil considering downgrading Russia’s B3 sovereign
Wintershall Dea has and gas projects in Russia until sanctions against rating. In addition to a fifth of its EBITDA, Win-
significant exposure the country have been lifted, cutting itself from tershall’s Russian business also generates just
to the Russian energy a business that generates around a fifth of its pre- short of a quarter of its free cash flow.
market. tax profit. Outside Russia, Wintershall also has a
Wintershall has been hard hit by the fallout 15.5% interest in the Nord Stream 1 gas pipe-
from Russia’s invasion of Ukraine, given its sig- line that delivers gas from Siberia to Germany.
nificant exposure to the Russian market. It has The pipeline’s majority-owner is Gazprom,
partnerships with Russia’s state-owned Gazprom although the EU is not likely to impose sanc-
at the Yuzhno-Russkoye and Achimov gas pro- tions against the project, out of fear that doing
jects in Siberia, which contribute almost half so could cause a disruption in Russian gas
of the 440,000 barrels of oil equivalent per day flow. In addition, Wintershall has an interest
(boepd) that Wintershall produces. in a German gas pipeline network and a Ger-
Wintershall issued a statement on March man subsidiary of Gazprom.
2 condemning Russia’s actions in Ukraine, but Wintershall itself is part-owned by Russian
unlike some other international oil compa- billionaires Mikhail Fridman and Petr Aven,
nies (IOCs), it did not say it intended to leave through their LetterOne investment firm. Both
the country in response. However, it did say it men have been placed on the EU’s sanctions list,
would not invest in any new projects in Russia, but because they do not hold a majority stake
nor make any payments to Russian entities. in LetterOne, the firm and those that it invests
“Wintershall Dea has been working in Russia in are not affected operationally. This said, the
for more than 30 years,” company CEO Mario businessmen have stepped down from Letter-
Mehren commented. “Many of our colleagues One’s board and will not collect dividends from
work for our company and our joint ventures the company until sanctions are lifted.
with partners with Russia on a daily basis. Many Fridman and Aven have denied support-
of our colleagues come from Russia or Ukraine. ing the Putin administration, and the former
For them in particular, but also for all of us, this has even publicly called for peace in Ukraine,
escalation on the orders of the Russian govern- describing events there as a “tragedy.” Yet Frid-
ment is a hard blow.” man has said it was the “right thing to do for
US credit rating agency Moody’s announced [LetterOne]” that they stepped back from the
on March 4 it was reviewing whether to company. ™

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