Rising oil and gas prices have more than offset the losses from Russia’s exit.
The oil industry was the sector that suffered the greatest financial losses after leaving Russia.
Of the total losses of approximately 100 billion euros, the losses suffered by the main oil companies represent around 40%.
BP reported a $24 billion impairment on its Russian business last year after it left the country. BP had a minority stake in Rosneft: at 19.75% it represented around 50% of BP’s total oil and gas reserves and a third of its oil and gas production.
Shell reported a $5 billion writedown on its exit from Russia last year, but said that would not affect its oil and gas profits. It was one of the first companies to declare it would leave Russia after the invasion of Ukraine.
TotalEnergies, however, was more hesitant to leave Russia. The French major had a stake in an LNG project led by Novatek, and at the end of 2022, Total said it would abandon it, predicting a loss of $3.7 billion as it could not sell it back to Novatek due of Western sanctions against Russia.
Earlier this year, TotalEnergies said it would take an impairment charge of about $4.1 billion on its exit from Russia, to be accounted for on its first-quarter 2022 balance sheet. The majority of that loss came from Novatek’s Arctic LNG 2 project. According to FT calculations, the total cost of TotalEnergies to leave Russia was $14.8 billion.
The surge in the prices of crude oil and gas last year certainly benefited the companies in the sector that managed to amortize the devaluation costs.
Rising oil and gas prices more than offset the losses recorded as BP, Shell, and TotalEnergies recorded a total of 95 billion euros in profits, equivalent to around $104 billion and more than double the combined impairment costs of approximately $40 billion.
But not all energy companies have abandoned Russia.
Mitsui & Co and Mitsubishi Corporation, two of Japan’s largest companies, continue to operate in Russia despite the sanctions of the G7, of which Japan is a party: last year the Tokyo government judged the stakes of Japanese companies held in Sakhalin-1 and Sakhalin-2 oil and gas projects, which are critical to the country’s energy security. As a result, Japanese shareholders were offered the opportunity to maintain their stakes in these strategic projects with Russia.
Original article published on Money.it Italy 2023-09-02 08:15:00. Original title: Svalutazioni e profitti: il bilancio in chiaroscuro dell’uscita dalla Russia delle aziende petrolifere
