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Putin orders seizure of foreign stakes in Siberian energy projects, marks first time “unfriendly” countries' assets handed to Russians

Russia has for the first time seized assets from owners based in “unfriendly countries,” according to a report by the Kommersant newspaper. Vladimir Putin has ordered the forced sale to Russian owners of the stakes held by two foreign companies, Germany's Wintershall Dea and Austria's OMV, in joint ventures with Russia’s state-owned gas giant Gazprom.

As noted by Kommersant, the Russian authorities had previously imposed external management or deprived owners from “unfriendly countries” of the ability to manage and profit from their Russian assets, but had not resorted to formal seizure until Putin’s most recent order.

Wintershall held shares in two joint ventures to develop the Achimov deposits of the Urengoy field in the Yamalo-Nenets Autonomous Area in Western Siberia. Wintershall also owned 35% of Severneftegazprom, the operator of the Yuzhno-Russkoye field development, and OMV owned another 24.99% of the same company. The shares in the Urengoy field will go to LLC Gazovye Tekhnologii (Gas Technologies), whose beneficiary is unknown, and the shares in the Yuzhno-Russkoye field, which was initially the main resource base for the Nord Stream gas pipeline, will go to SOGAZ, a Russian insurance company.

Kommersant reports that the foreign companies will receive compensation, with the amount being determined by the Russian government. However, these funds will be frozen in Russia in type C accounts. When Wintershall left Russia in January, it estimated the loss from the write-off of assets, including shares in both Nord Stream pipelines, at €5.3 billion.

The EU's 12th sanctions package, announced on December 18, imposed sanctions on Russian companies for their involvement in transactions to seize European companies’ assets in Russia.

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