The German company Wintershall Dea does not lose hope of recovering part of the investment made in the development of two fields in Russia.
“As part of a lawsuit related to the expropriation of Russian assets, Wintershall Dea initiated two arbitration proceedings against the Russian Federation to protect its legal position and the interests of shareholders. The reason for such proceedings is violations by the Russian Federation of its obligations under the bilateral investment protection agreement with the Federal Republic of Germany and the Energy Charter Treaty.” — reports Wintershall Dea.
The company reported that it is changing its form from a joint stock company to LLC and after the sale of its main assets (in Libya and the Netherlands) to the British Harbor Energy it will focus on selling the remaining assets and filing claims against the Russians.
Wintershall Dea is owned by BASF and LetterOne and was a major customer of Gazprom. Last December, the Russian president Vladimir Putin signed a decree on special economic measures in the fuel and energy sector in connection with the hostile actions of some foreign states and international organizations. The document assumed that the government would create three LLCs – Severneftegazprom, Gazprom YURGM Trading and Gazprom YURGM Development – and that all assets of the joint-stock companies of the same name would be transferred to them. These are joint ventures between Gazprom, Germany’s Wintershall and Austria’s OMV, which are developing the Yuzhno-Russkoye field and the Achimov fields.
The reserves of the first fishery are estimated at more than 1 billion cubic meters. The second is part of the Urengoy field with total reserves of 16 billion. The annual production of both fields can exceed 60 billion cubic meters.
It was proposed to buy shares in European companies from the SOGAZ joint stock company, which would transfer the money to type “C” accounts, open to non-residents.
Payments to companies from hostile countries were suspended early last year, but their amounts continued to accumulate in Russia itself. Thus, Wintershall Dea indicated in its report for the third quarter of 2022 that the group constantly monitors restrictions on the transfer of funds and, as of September 30, its subsidiaries in Russia had accumulated cash and cash equivalents worth 1.96 thousand million euros.
Wintershall Dea reported that its gas production in Russia increased from 33 million cubic meters per day to 40 million cubic meters, and EBITDAX in Russia amounted to €518 million in the third quarter. This is four times more than in July-September 2021.
This growth was associated with abnormally high gas prices in Europe and the development model of the Yuzhno-Russkoye field. The joint venture OJSC Severneftegazprom sold gas to traders JSC Gazprom YURGM Trading and JSC Gazprom YURGM Development, which resold it taking into account the export price (netback) to Gazprom and 100% of the profits went to Wintershall Dea and OMV.
The German company’s report said: if in the third quarter of 2021 the sales price of gas averaged $40 per thousand cubic meters, this year it was $150. In turn, the Russian government complied with the presidential decree and set a price retroactively. limit for German and Austrian companies of up to 2,550 rubles per thousand cubic meters before entering the main gas pipeline transportation system from March 1, 2022.
Thus, the German company lost income, after which it announced its departure from Russia.
Experts associated the introduction of the limit with the fact that, due to sabotage in Nord Stream, the physical export of gas was stopped, it is sold within Russia and there is no point in operating an export netback, which allowed Wintershall Dea and OMV. receive huge funds into the accounts of their joint ventures.
The German company received part of its assets in Russia as part of the exchange. Gazprom became 50% owner of Wintershall Noordzee. The joint venture portfolio consists of 36 fields under 33 licenses in the Netherlands, Great Britain and Denmark. And this year the Russian company tried to sell its assets. However, a Dutch court imposed a security arrest on the shares due to a lawsuit from the Ukrainian company Slavutich-Invest. She owned land in Melitopol, which is now part of the new regions of Russia.
