The company is the largest German gas and oil producer.
(Photo: Reuters)
Dusseldorf The Kassel-based company Wintershall Dea reports a successful financial year in operational terms. The group increased its operating profit (called Ebitdax at Wintershall) by 91 percent compared to the previous year to 5.9 billion euros. Wintershall announced this on Thursday.
But the high operating profit is offset by a significant loss: after almost a year of war in the Ukraine, Wintershall announced in January that it would withdraw completely from Russia. This brings the group a whopping loss of 4.8 billion euros for the 2022 financial year, after a profit of 593 million euros in the previous year.
Excluding Russia, Wintershall’s adjusted net income increased by 130 percent to 928 million euros. If the Russian business and its income were still there, the net result would have been 2.36 billion euros, according to Wintershall. Instead, the company has to deal with the processing of the area.
Long hesitation despite massive criticism
Wintershall boss Mario Mehren said about the withdrawal in January: “In the past few months, the Russian government has restricted the activities of Western companies in the country.” The joint ventures that Wintershall operates with the Russian energy group Gazprom have been de facto economically expropriated.
Wintershall is a subsidiary of the chemical group BASF and has in the past produced oil and gas together with Gazprom through three joint ventures in Siberia. This business has been lucrative for a long time and could continue to be so given the still quite high gas prices. In fiscal 2021, the Russian business contributed about a fifth of operating profit.
>> Read about this: Wintershall’s withdrawal from Russia leaves a billion-dollar gap in BASF’s finances
However, Wintershall has not been able to benefit from business in Russia since the beginning of the war. Mehren had explained: “Our earnings are trapped in Russia. We haven’t received any money from the country since February of this year.”
This did not detract from the criticism of Wintershall’s involvement in Russia by environmental organizations such as Urgewald and Greenpeace. In addition, there were media reports in November that one of Wintershall’s joint ventures was said to have supplied gas condensate to one of the Russian Air Force’s most important suppliers. Wintershall had rejected the allegations as fabricated.
Despite the massive criticism and the economically unattractive situation, Wintershall hesitated for a long time before withdrawing completely from Russia. Last year, the group initially legally separated its Russian business from the rest of the business. However, Wintershall boss Mehren had argued that if Wintershall withdrew completely, it would simply give its production facilities to the Russian state. That didn’t help anyone. Now Wintershall has done just that.
Instead, the company is now looking around the world for new business. In October, for example, it announced that it wanted to take over 37 percent of an oil and gas field called Hokchi in Mexico. Wintershall also wants to produce up to ten percent more gas and oil from its fields in Germany – provided the necessary permits are available.
More: Chemical company BASF shuts down plants to reduce energy costs
