Equinor and Daimler Truck cut Russia ties as Volvo halts car deliveries

The Equinor oil group in Norway and the German Daimler Truck terminate their partnerships with Russian businesses while Volvo said it would stop shipping cars to the country with the spread of corporate fallout from the invasion of Ukraine.

The announcements came as multinational groups operating in Russia face the impact of the reputation of their relationship with the country, as well as possible exposure to Western sanctions designed to inflict severe economic pain.

Renault also said on Monday that it was halting operations at one of its Russian plants for a week, while the carmaker faced supply chain disruptions.

The previous day, BP announced it was removing almost 20% of its shares in Rosneft, as its chairman, Helga Lund, described the Russian invasion of Ukraine as “an act of aggression that has tragic consequences across the region”.

Aquinor said it is “coming out” of joint ventures in Russia that include a strategic partnership with the Rosneft government oil group that includes projects across Siberia.

Equinor CEO Anders Opdal said: “In the current situation, we see our position as intolerable. “We will now stop making new investments in our Russian business and start the process of getting out of our joint ventures in a way that is in line with our values.”

He said Aquinor, which is two-thirds owned by the Norwegian government, was “very upset” by Russia’s invasion of Ukraine.

Daimler Truck, the world’s largest truck maker, said it had made the decision to “immediately suspend all of our business operations in Russia,” even though its contract with local automaker Kamaz restricts cooperation to civilian vehicle production. Separately, Kamaz, established under the Soviet Union, manufactures vehicles for Russia’s armed forces.

Volvo Cars has explicitly cited the impact of Western fines, as it said it would “not supply cars to the Russian market until further notice”. The decision is because of “the potential risks associated with the trade in the substance with Russia, including the sanctions imposed by the EU and the US”.

Truck maker Volvo, which is not dependent on the car company, has also halted production at its one plant in Russia and stopped sales to the country until further notice, the group said on Monday, noting the risk of sanctions.

Following warnings from other carmakers that they may struggle to move components to and from Russia, Renault said it had temporarily shut down its plant in Moscow, which makes models like Renault Captor and Arcana SUVs, due to supply chain problems.

More of the French group’s plants operated by its Russian Avtovaz business also stopped production on Monday, but this was due to a shortage of semiconductors, a spokesman said. Production was scheduled to resume there on Tuesday.

Russia is Renault Group’s second-largest market in terms of sales, while Avtovaz accounted for about 7% of its total revenue last year.

Aquanor said it expects to take on depreciation-related ventures. The company has been in Russia for more than 30 years and expanded its partnership with Rosneft in 2020, paying $ 550 million to acquire 49% of shares in a dozen exploration and production licenses in Eastern Siberia.

Aquinor’s current production in Russia is modest and stands at only 25,000 barrels worth of oil per day compared to its total group of about 2 million barrels per day. It has 70 employees in Russia.

The Norwegian government on Sunday ordered its $ 1.3 billion oil fund, the world’s largest sovereign wealth fund, To breeze $ 3 billion in Russian investments.

Daimler Truck’s move is unlikely to have a big impact on its profits as the truck maker sells only a few thousand units in Russia each year.

Mercedes-Benz AG, which in its previous disguise as Daimler AG was the parent company of Daimler Truck, said it was also looking to sell 15 percent of Kamaz shares.

Equinor and Daimler Truck cut Russia ties as Volvo halts car deliveries Source link Equinor and Daimler Truck cut Russia ties as Volvo halts car deliveries

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