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Wintershall DEA writes off €1bn Nord Stream 2 finance

© Supplied by ? Nord Stream 2 / AxMen raise hands in victory next to pipeline
OMV will not go ahead with its purchase of a stake in Gazprom?s Urengoy gas and condensate field. It is also "reviewing" its involvement in Nord Stream 2. Picture shows; On September 6, 2021, specialists on the laybarge Fortuna welded the last pipe of the two strings of the Nord Stream 2 Pipeline. The pipe number 200,858 was subsequently lowered onto the seabed in German waters.. Fortuna barge. Supplied by Nord Stream 2 / Axel Schmidt. Date; 06/09/2021

Wintershall DEA says it will not “advance or implement” any oil and gas projects in Russia, and will write off its €1 billion (£830 million) financing of Nord Stream 2.

Following a meeting today, the company’s board said it would not pursue any additional gas and oil production projects in Russia and would cease all planning for new projects.

It would also see the company “basically stop payments to Russia with immediate effect” its statement added.

Five energy companies – Shell, OMV, Engie, Uniper and Wintershall DEA – each committed to provide financing and guarantees for the estimated €9.5 billion total cost of the 55 billion-cubic-metre-per-year Nord Stream 2 pipeline, alongside Gazprom, which bore half the cost.

OMV said yesterday it was reviewing its involvement, while Shell said it would end its interests in the project.

Reports emerged yesterday from Reuters that the Switzerland-based company which built and operates the pipeline had filed for bankruptcy in the wake of sanctions, citing sources familiar with the situation.

The US Treasury Department’s Office of Foreign Assets Control issued an executive order last month authorising “the wind down of transactions involving Nord Stream 2 AG” or “any entity in which Nord Stream 2 AG owns, directly or indirectly, a 50 percent or greater interest” by March 2.

In a statement on its website, Nord Stream 2 AG said: “We cannot confirm the media reports that Nord Stream 2 has filed for bankruptcy. The company only informed the local authorities that the company had to terminate contracts with employees following the recent geopolitical developments leading to the imposition of US sanctions on the company.”

The company added it had taken down the remainder of its website “due to serious and continuous attacks from outside.”

Yuzhno Russkoye and Achimov

However, Wintershall DEA said it “remains involved” in the existing Yuzhno Russkoye and Achimov natural gas projects in Siberia, which it said “produce natural gas for European energy supply.”

It holds a 35% share in the former project, via the Severneftegazprom joint venture with Gazprom.

It also holds a 50% stake in the Achimgaz project on the Urengoyskoye field alongside Gazprom’s subsidiary Gazprom Dobycha Urengoy, and a 25.01% stake in a newer development at Area 4A/5A of the same field, also with Gazprom.

It remains active in GASCADE Gastransport, which operates a 3,200 km gas pipeline network in Germany.

The company’s executive committee and board also issued a joint statement alongside the announcement, in which they said:

“We – the General Works Councils, Executive Representative Committee and the Board of Wintershall Dea– condemn the Russian president’s war of aggression in the strongest possible terms. He is violating not only international law, but everything we stand for as a company: freedom, the rule of law, democracy and diversity. Values to which we are unconditionally and uncompromisingly committed.”

“We have been working in Russia for over 30 years. Many of our colleagues at our other locations also work with partners from Russia on a daily basis – at Wintershall Dea or in our joint ventures. Many of our colleagues come from Russia or Ukraine. From Belarus or the countries of Central Asia. For them – but also for all of us – this war against Ukraine is a major blow. We stand with our Ukrainian and Russian colleagues at all Wintershall Dea locations who live and stand up for our values of freedom and peace.”

“We have built many personal relationships – including in our joint ventures with Gazprom. But the Russian war of aggression against Ukraine marks a turning point. What is happening now is shaking the very foundations of our cooperation.”

It follows a similar statement issued by the company’s chief executive Mario Mehren yesterday.

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