Vladimir Putin Ordered to Deprive Wintershall and OMV of a Stake in Russian Assets
Putin signed decrees depriving Wintershall and OMV of their shares in two joint ventures with Gazprom.
Putin ordered the creation of an LLC to manage the Yuzhno-Russkoye and sections of the Achimov deposits of the Urengoy oil and gas condensate field; SOGAZ and Gas Technologies are offered to acquire shares in them.
The German oil and gas company Wintershall and the Austrian OMV lost their rights in companies that were developing the Yuzhno-Russkoye oil and gas condensate field and the Achimov deposits of the Urengoy field, as follows from the decrees signed by Vladimir Putin.
Production at the Yuzhno-Russkoye field was carried out by OJSC Severneftegazprom, whose shareholders are PJSC Gazprom (economic participation share is 40%), Wintershall (35%) and OMV (25%); in the Achimov deposits – JSC Achimgaz, shareholders – Wintershall and LLC Gazprom Dobycha Urengoy (100% owned by Gazprom). According to SPARK, each company owns 50% in Achimgaz.
According to the decrees, all rights and obligations of joint ventures will be transferred to LLCs created by the Russian government. Russian shareholders will receive shares in them proportional to the shares in joint ventures (JVs). Shares proportional to the ownership share of foreign companies in the former joint ventures will be transferred to the LLC itself. They, in turn, are proposed to be purchased by SOGAZ JSC (in an LLC associated with the Yuzhno-Russkoye field) and Gas Technologies (in an LLC associated with the Achimov deposits). Proceeds from the sale will be transferred to special type C accounts in the name of the previous foreign owners of the shares.
RBC sent requests to the Ministry of Energy, Gazprom, BASF and Wintershall Dea.
The Yuzhno-Russkoye field is located in the Yamalo-Nenets Autonomous Okrug, east of Novy Urengoy. Its reserves are estimated at more than 1 trillion cubic meters. m of gas, over 50 million tons of oil and gas condensate. Design capacity is 25 billion cubic meters. m of gas per year.
The Urengoyskoye field is located in the same area, north of Novy Urengoy. Its total reserves are estimated at 16 trillion cubic meters. m of gas. Mining is carried out in hard-to-reach Achimov deposits (one of the types of sediments depending on the depth of occurrence) at a depth of 3.5–4 thousand m; at five sites, the planned design production capacity is 37 billion cubic meters. m per year.
Wintershall Dea is the largest oil and gas company in Europe, 72.7% of it is owned by BASF, the rest by LetterOne. It produces gas and oil in Norway and Germany, and operates in Latin America, Egypt and the Middle East. In January 2023, the company announced its intention to leave Russia. This was preceded by the decision of the Russian government to introduce caps on gas prices, above which Gazprom is prohibited from buying it from enterprises that it jointly owns with Wintershall. In July, the company began the legal separation of its Western business from its enterprises in Russia.
The Austrian OMV announced in March 2022 that it was abandoning new investments in Russia and was going to reconsider its stake in the Yuzhno-Russkoye oil and gas field. At the same time, this summer, the head of the company, Alfred Stern, said that OMV will not refuse Russian gas and will continue to purchase it in the winter (Gazprom and OMV have had a long-term contract since 2018, valid until 2040). The company previously agreed to pay Russia for gas supplies under a new scheme, which was introduced in the country in April last year due to sanctions. In accordance with it, buyers were required to open two accounts with Gazprombank: foreign currency and ruble. Payment comes to the first one, and then the bank converts the received funds and credits them to a ruble account.
