Following the withdrawal of several supermajors such as BP and ExxonMobil from Russia because of its war in Ukraine, some of the world’s largest oilfield service companies have dealt a new blow to the Russian oil sector by suspending their activities there threatening the future growth of the flourishing sector.
Giant oilfield service companies Halliburton, Schlumberger, and Baker Hughes were the latest in a string of western companies leaving Russia.
These companies continue to exit the Russian market in response to sanctions from the US and its allies in their efforts to economically isolate Russia. However, many can see the withdrawal of oil companies from Russia as more surprising due to the lucrative deals they are leaving voluntarily.
In a press release, Halliburton said that it suspended future business in Russia as “it complies with sanctions prohibit transactions and work, including for certain state-owned Russian customers.”
Halliburton added also that it stopped sending all the shipments of specific sanctioned parts and products to Russia noting that it does not have any joint ventures operating there.
“The war in Ukraine deeply saddens us. We have employees in both Ukraine and Russia, and the conflict greatly impacts our people, their families, and loved ones throughout the region,” said Halliburton Chairman, President, and CEO Jeff Miller. “Since the start of this conflict, we prioritized employee safety and compliance with all relevant sanctions.”
Halliburton is one of the world’s largest providers of products and services for the energy industry. It is working in more than 80 countries worldwide.
Additionally, Schlumberger announced in another press release that it decided to immediately halt providing new investments and technology deployment to its operations in Russia. Olivier Le Peuch, Schlumberger’s CEO said “As the situation has developed, we have been evaluating our path forward, and have decided to immediately suspend new investment and technology deployment to our Russia operations.”
Le Peuch also emphasized that safety and security are at the core of Schlumberger’s keenness to ensure the health, safety, and security of the company’s employees and their families in Ukraine, Russia, and throughout the region. “We continue to actively monitor this dynamic situation and will fulfill any existing activity in full compliance with applicable international laws and sanctions,” Le Peuch added.
Schlumberger is an oil technology service company that provides digital solutions and deploys ground-breaking technologies to enable performance and sustainability that are crucial for the global energy industry.
In its remarks about its withdrawal from Russia, Baker Hughes highlighted that it commits to the applicable laws and sanctions as it fulfills current contractual obligations.
“The crisis in Ukraine is of grave concern and we strongly support a diplomatic solution. We condemn violence and our hearts go out to the people and families of those impacted,” said Lorenzo Simonelli, chairman & CEO of Baker Hughes.
“The health and safety of our employees, customers, partners, and their families always remains our top priority. We have been continuously monitoring the situation, and today’s announcement follows an internal decision made with our Board of Directors and communicated to our leadership team earlier this week. We remain committed to act in full compliance,” Simonelli added.
Baker Hughes is an energy technology company that works in more than 120 countries on supplying solutions, innovative technologies, and services to support the energy industry in making it more efficient and cleaner.
Several major oil companies have decided to withdraw from their operations in Russia in response to the U.S. sanctions. By the end of February, bp and Equinor decided to exit and halt their work in Russia. Also, the major retail companies Shell, ExxonMobil, and TotalEnergies announced that they will withdraw from all hydrocarbon business in the Russian market.
Furthermore, AG’s Management Board of Wintershall Dea decided to stop advancing or developing new oil and gas projects in Russia and to write off its financing of Nord Stream 2 totaling around 1 billion euros.
The decision by western oil companies to turn down highly profitable business in a country as rich in vast reserves as Russia reflects the importance of social responsibility in the energy sector’s corporate world. Some experts see the sacrifice that these companies chose to make as a demonstration of the importance these companies are giving to their reputation over financial profits.