The List of Foreign Companies Pulling Out of Russia Keeps Growing

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The List of Foreign Companies Pulling Out of Russia Keeps Growing

What was an enticing new market 30 years ago is now spurned.

The invasion of Ukraine is causing a mass exodus of companies from Russia, reversing three decades of investment by Western and other foreign businesses there following the collapse of the Soviet Union in 1991.

The list of those cutting ties or reviewing their operations is growing by the hour as foreign governments ratchet up sanctions against Russia, close airspace to its aircraft and lock some banks out of the SWIFT money messaging system. With the ruble plunging and the U.S. banning transactions with the Russian central bank, operating in Russia has become deeply problematic. Some companies have concluded that the risks, both reputational and financial, are too great to continue.

For some companies, the decision to exit Russia is the conclusion of decades of lucrative, if sometimes fraught, investments. Foreign energy majors have been pouring money in since the 1990s. Russia’s largest foreign investor, BP Plc, led the way with its surprising announcement on Sunday that it would exit its 20% stake in state-controlled Rosneft, a move that could result in a $25 billion write-off and cut its global oil and gas production by a third.

The stake was the product of a protracted battle in 2012 for control over TNK-BP, a joint venture between the oil giant and a group of billionaires. It’s now weighing whether to sell its stake back to Rosneft, according to people familiar with the situation.

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Shell owns 50% of the Salym Petroleum Development, which last year earned the company $700 million of adjusted earnings. Photographer: Andrey Rudakov/Bloomberg
Shell Plc followed on Monday. Citing Russia’s “senseless act of military aggression,” it said it is ending partnerships with state-controlled Gazprom, including the Sakhalin-II liquefied natural gas facility and its involvement in the Nord Stream 2 pipeline project, which Germany blocked last week. Both projects are worth about $3 billion. Kwasi Kwarteng, the U.K. business secretary, met with Shell Chief Executive Officer Ben van Beurden on Monday to discuss the company’s involvement and welcomed the move.