Thoughts on the impact of foreign companies exiting the Russian oil and gas industry
Russia’s invasion of Ukraine has catalysed a chorus of dismay and outrage from western companies with investments in Russia and has led some to announce their withdrawal from the country. Furthermore, it has also caused the US and the EU to impose sanctions on individuals and companies involved in the energy sector and to announce restrictions on investment in key industries, including oil and gas. These sanctions build on those which had already been imposed in the wake of Russia’s annexation of Crimea in 2014. Together with the withdrawal of some major IOCs they are likely to undermine both the current operation, but more especially the future development, of the Russian oil and gas sector.
This Insight aims to review the involvement of international companies in the Russian oil and gas sector since the fall of the Soviet Union in 1991 and to assess the likely impact of the key withdrawals announced to date and the possible further withdrawals which may occur if the situation in Ukraine continues or deteriorates. It will also assess the possible impact of the sanctions announced so far and will consider the potential outcome for Russian oil and gas production and exports over the short to medium term.