In exceptional cases, Vladimir Putin can issue special permits.
(Photo: IMAGO/SNA)
Riga Kremlin boss Vladimir Putin is making it difficult for some foreign oil companies and banks to exit business with Russia. Until December 31 of this year, investors from countries that Russia classifies as “unfriendly countries” will be banned from transacting shares in certain strategically important Russian energy and financial companies.
The Russian President signed a corresponding decree last Friday. The group of these states includes all EU states, the USA, the United Kingdom, South Korea and Taiwan.
Transactions in securities constituting the registered capital, as well as rights and obligations or shares and contracts, on the basis of which investment projects are implemented in Russia, are affected by the ban.
However, the decree provides for a special role for the president: In exceptional cases, Putin can issue special permits, as the document shows. Transactions that expire despite the ban will henceforth be considered null and void.
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The country’s government now has ten days to submit a list of affected companies to Putin for approval. However, two ventures are explicitly mentioned in the text: first, Sakhalin I, a project to produce oil and natural gas near the island of Sakhalin in the Pacific Ocean, and second, the Charjaga oil field in northern Russia.
Russian oil: Exxon Mobil and Total want to get rid of holdings
In the case of Sakhalin I, the US oil company Exxon Mobil, which operates the field, is particularly affected. The company announced on March 1 that it would take steps to exit the project in response to Russia’s February 24 attack on Ukraine.
A few days before the decree was published, Exxon said it was in talks to transfer its 30 percent stake in Sakhalin I to an unnamed company. The oil company produced around 227,000 barrels per day there last year.
The much smaller Charjaga oil field produced around 31,000 barrels per day last year. France’s Total Energies announced in July that it would transfer its 20 percent stake in the field to the Russian state-owned oil company Zarubezhneft, which operates the project. Norway’s Equinor, which holds 30 percent, said at the end of May that it would leave the field.
>> Read here: “HSBC is setting a precedent”: Moscow wants to block the withdrawal of foreign credit institutions
Foreign banks, which are also affected by the decree, have been trying for some time to further withdraw from Russia because of Russia’s invasion of Ukraine. But the Russian government is working to block the withdrawal of foreign credit institutions.
The major British bank HSBC only announced at the end of July that it wanted to sell its Russian business to Expobank. At that time it was said that the completion of the transaction still had to be approved by the Russian authorities. A decision on this has not yet been made.
More: “Times are getting much worse” – Europe’s banks fear expropriations in Russia.