Oil Companies Slowly Getting Out of Russia
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Oil Companies Slowly Getting Out of Russia

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Karin Dilge By Karin Dilge | Journalist and Industry Analyst - Wed, 03/09/2022 - 16:01

Two major IOCs have divested their considerable holdings and commitments in Russian oil and gas companies as a direct response to Russia’s movements in Ukraine, according to top executives. BP has announced that it would abandon its participation in Russian NOC Rosneft, equivalent in stock holdings to 19.75 percent of the Russian company. BP’s announcement was followed by Norway’s Equinor on Monday, which claimed that its board of directors “has decided to stop new investments in Russia and to start the process of exiting Equinor’s Russian joint ventures.”

Want to know more? Here’s the Week in Oil and Gas!

PEMEX Announces Losses Adding Up to US$6 billion

The NOC reported a net loss of US$6.05 billion in 4Q21 and explained the losses were due to higher taxes and currency exchange rates despite more oil output. PEMEX will likely require big cash input from the government to counter its losses.

Fuel Oil Production Highest in a Decade

According to a paper published by IMCO, PEMEX’s fuel oil production is the highest in a decade with results for 2021 showing production of 244Mb/d, which was 38.6 percent higher than the results from 2020 and 62.7 percent above those from 2019. The production increase is still ongoing, with fuel oil already flooding the NOC’s terminals.

PEMEX Touts Investment Levels but Fails to Acknowledge Losses

In comparison to other state oil companies, PEMEX performed the best in terms of CAPEX and EBITDA. However, among the companies mentioned by Antonio López Velarde, Financial Director, PEMEX, Mexico’s NOC was the only one to register losses in 2021.

Braskem Strikes Deal With PEMEX

In an effort to avoid conflict with Mexican authorities, Braskem made a pact with PEMEX to invest US$400 million in ethane storage and import terminals. These, however, will not alter the 15 year-long contracts between the two companies. However, raw material purchases from the NOC will depend on production.

PEMEX Enters Fertilizer Program 

Due to a fertilizer shortage provoked by the conflict between Russia and Ukraine, PEMEX will cover the country’s demand gap by delivering 352,000 tons of fertilizers to small agricultural producers as part of its “Fertilizers for Well-Being” program. Russia is one of the main producers of fertilizers globally and is Mexico’s main source of imported fertilizers.


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