(Bloomberg) -- Wintershall Dea AG will write off its financing of the Nord Stream 2 natural gas pipeline project as pressure grows on energy companies to exit business interests connected to Russia in response to the invasion of Ukraine.
The German oil and gas producer, jointly owned by BASF SE and Russian billionaire Mikhail Fridman's investment firm LetterOne, will write off around 1 billion euros ($1.1 billion), it said Wednesday in a statement. It has also decided to postpone dividends following the move.
Wintershall Dea “remains involved” in the existing Yuzhno Russkoye and Achimov gas projects in Siberia, it said, adding that those joint ventures with the state-run gas giant Gazprom PJSC produce the vital fuel for the European market. Yet, the company decided “to basically stop payments to Russia with immediate effect,” and it won't pursue new projects in the country.
First BP, Now Shell: Big Oil Walks Away After Decades in Russia
In a matter of days, several energy companies have set out plans to exit Russian investments at a likely cost of tens of billions of dollars, upending relationships with Moscow that have been cultivated over decades. Some, like Shell Plc or Exxon Mobil Corp., have decided to ditch investments in Russia altogether, while France's TotalEnergies SE will no longer provide capital for new projects in the country.
The Nord Stream 2 link was completed in December, but its approval process was virtually stopped after the invasion. Gazprom is the sole owner of the link, though five European energy companies -- Shell, Wintershall, OMV AG, Engie SA and Uniper SE -- provided loans to finance the $11 billion project.
“The terrible events in Ukraine caused by the Russian invasion have sent shockwaves around the world,” Wintershall Dea Chief Financial Officer Paul Smith said in a statement. “And given the unprecedented uncertainty the company has decided to postpone the decision on the distribution of a dividend until further notice.”
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