Norway’s Equinor oil group and Germany’s Daimler Truck are ending their partnerships with Russian businesses while Volvo said it was halting the delivery of cars to the country as the corporate fallout from the invasion of Ukraine spreads.
The announcements came as multinational groups with operations in Russia grapple with the reputational impact of their association with the country as well as potential exposure to western sanctions designed to inflict severe economic pain.
Renault also said on Monday that it was pausing operations at one of its Russian factories for a week as the carmaker grapples with supply chain disruption.
The previous day BP said it was divesting its nearly 20 per cent stake in Rosneft as its chair Helge Lund described Russia’s invasion of Ukraine as an “act of aggression which is having tragic consequences across the region”.
Equinor said it was “exiting” joint ventures in Russia that include a strategic partnership with state oil group Rosneft encompassing projects throughout Siberia.
Equinor chief executive Anders Opedal said: “In the current situation, we regard our position as untenable. We will now stop new investments into our Russian business and we will start the process of exiting our joint ventures in a manner that is consistent with our values.”
He said Equinor, which is two-thirds owned by the Norwegian government, was “deeply troubled” by Russia’s invasion of Ukraine.
Daimler Truck, the world’s largest truckmaker, said it had taken the decision to “immediately suspend all our business activities in Russia” even though its contract with local vehicle maker Kamaz limits co-operation to manufacturing civilian vehicles. Separately, Kamaz, which was established under the Soviet Union, makes utility vehicles for Russia’s armed forces.
Volvo Cars specifically cited the impact of the west’s financial penalties as it said it “will not deliver any cars to the Russian market until further notice.” The decision is because of the “potential risks associated with trading material with Russia, including the sanctions imposed by the EU and US.”
Truckmaker Volvo, which is independent of the car company, also halted production at its one factory in Russia and stopped sales to the country until further notice, the group said on Monday, citing the risk of sanctions.
Following warnings from other automakers that they could struggle to transport components into and out of Russia, Renault said it had temporarily closed its Moscow plant, which produces models such as the Renault Captur and its Arkana SUVs, because of supply chain problems.
Another of the French group’s factories operated by its Russian Avtovaz business also halted production on Monday, but that was down to semiconductor shortages, a spokesperson said. Manufacturing was due to resume there on Tuesday.
Russia is the Renault group’s second biggest market by sales volumes, while Avtovaz last year made up around 7 per cent of its overall revenues.
Equinor said it expected to take impairments related to the ventures. The company has been in Russia for more than 30 years and expanded its partnership with Rosneft in 2020, paying $550mn to gain a 49 per cent stake in a dozen exploration and production licences in eastern Siberia.
Equinor’s current production in Russia is modest at just 25,000 barrels of oil equivalent a day versus its group total of about 2mn barrels a day. It has 70 employees in Russia.
Norway’s government on Sunday ordered its $1.3tn oil fund, the world’s largest sovereign wealth fund, to ditch its $3bn in Russian investments.
Daimler Truck’s move is unlikely to have a large impact on its profits as the truckmaker sells just a few thousand units in Russia each year.
Mercedes-Benz AG, which in its previous guise as Daimler AG was the parent company of Daimler Truck, said it was also looking to divest a 15 per cent stake in Kamaz.