Economy 1 March 2022, 5:35pm

Russia bans western companies from exiting Russian investments

Portfolio

Russia will temporarily stop foreign investors from dropping Russian assets, the country's Prime Minister Mikhail Mishustin said today. The move, which follows increasingly stringent and ever wider sanctions the West is imposing on Russia for the invasion of Ukraine, is to ensure these investors take a considered decision, not one driven by political pressure, he added.

Foreign businesses are under political pressure from the growing international movement to hit Russia with sanctions, he told a government meeting.

In order to give business a chance to make a considered decision, a presidential order was prepared to impose temporary curbs on exit from Russian assets,

he said.

Politico made a list of major energy companies that have already announced they would seek to sell or otherwise limit their business involvement in Russia.

On Sunday, British BP said it would it would exit its 19.75% shareholding stake in Russia's largest oil refiner Rosneft, which could result in a writedown of up to $25 billion.
Norway's Equinor also said Sunday it would exit its Russian joint ventures. In 2021 it held $1.2 billion in non-current assets in Russia.
On Monday, Shell said it would sell off its stakes in oil and gas exploration and production projects in Russia, as well as cut ties with the Nord Stream 2 pipeline project. Its non-current assets in Russia were worth about $3 billion last year.
Today, France's TotalEnergies said it would no longer provide capital for new projects in Russia — but was silent on its existing 19.4% share in Novatek, Russia's largest liquefied natural gas (LNG) company, and on its involvement in already-approved LNG projects.
Italy's Eni, which has longstanding partnerships with Russia's Gazprom and Rosneft in production, exploration and downstream refining of oil, has not publicly taken a stance.
Neither has U.S.-based Exxon, which holds a 30% stake in the Sakhalin LNG project in Russia's Far East.

Russia's huge sovereign wealth fund will also be pressed into action, spending up to 1 trillion roubles ($10.3 billion) to buy shares in Russian companies, a government decree showed, confirming an earlier report by Reuters.

In the current sanction situation foreign entrepreneurs are forced to be guided, not by economic factors, but to make decisions under political pressure,

Reuters cited PM Mishustin as telling a governmental meeting.

"In order to give business a chance to make a considered decision, a presidential order was prepared to impose temporary curbs on exit from Russian assets," he said, without giving details.

Mishustin said Russia was "open to dialogue with constructively-minded investors" and that: "We expect that whose who invested into our country will be able to work here further on."