Wintershall increases operating result significantly – and acquires alternatives from Russia

Wintershall oil drilling in Emlichheim

Wintershall Dea is the only German company that also produces significant quantities of oil and gas in Germany itself.

(Photo: AP)

Dusseldorf The Kassel-based company Wintershall Dea is benefiting greatly from the high global oil and gas prices. The group increased its operating result in the third quarter compared to the previous year by 162 percent to 2.6 billion euros. Wintershall announced this on Tuesday.

Adjusted net income rose to 851 million euros, an increase of 264 percent compared to the third quarter of 2021. The average daily production of oil and gas was only four percent higher than the same period last year.

Wintershall lowers the annual forecast from a maximum of 1.1 billion euros to under one billion. The group reports a non-cash special write-down on its stake in Nord Stream AG in the amount of 175 million euros. Nord Stream AG, based in Switzerland, operates the Nord Stream 1 pipeline, in which Wintershall held a 15.5 percent stake and in which a huge hole was recently discovered as a result of a suspected attack.

Wintershall is increasingly expanding its activities in countries outside of Russia. On Monday evening, the group announced that it would take a 37 percent stake in an oil and gas field called Hokchi in Mexico. According to information from the Handelsblatt, Wintershall is investing several hundred million euros in this.

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A few days ago, the company also signed a joint declaration of intent with the company HES Wilhelmshaven Tank Terminal to develop a so-called CO2 hub. CO2 is to arrive there from German industrial companies and be transported to CO2 storage facilities in the Danish and Norwegian North Sea.

Wintershall Dea is the only German company that also produces significant quantities of oil and gas in Germany itself. Due to the energy crisis, Wintershall can sell its raw materials at high prices – but the group is also suffering enormously from the conflict with Russia. Wintershall had close ties to Russia for many years and still has joint ventures with Gazprom there today. The situation poses serious challenges for the German group.

Relations with Russia cannot simply be severed

To this day, Wintershall has not been able to free itself from its Russian business. Wintershall CEO Mario Mehren argues that any changes to the holdings in Russia require direct approval from the Russian President. Wintershall cannot simply give up the drilling sites in Russia, abandon employees and leave the platforms to the Russians. And there is no buyer in the current situation either.

>> Read also: Wintershall and Equinor plan pipeline for CO2 transport in the North Sea

In the past, the Russian business has contributed significantly to Wintershall’s revenues. 95 percent of Wintershall’s business is based on oil and gas production, with Russia accounting for almost half of production in the 2021 financial year. Russian production contributed around 20 percent to Wintershall’s operating result in 2021 as a whole.

Since the beginning of the war, Wintershall has received no more money from Russia. The dividends that the subsidiaries generate locally cannot flow to the parent company.

More: Comment: With double boom and 200 billion in the gas shortage: Federal government thwarts its own energy strategy

Handelsblatt energy briefing

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