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29 Jan 2023

Billy Briggs, The Ferret

Baker Hughes allegedly exported drilling equipment from Scotland to Russia months after ministers called on businesses to cease trading; incl. co. comments

US oil firm in Montrose exported to Russia months after calls for trading to cease, 29 January 2023

...Documents seen by The Ferret reveal that £21m of import registrations from Baker Hughes Energy Technology UK were filed with the Russian customs service on 11 September 2022.

There is no suggestion that the business broke the law or any international trade sanctions, but the transaction still went ahead in spite of the Scottish Government’s appeal.

All the exports from Scotland to Russia appear to involve equipment for the oil and gas industry, with 17 of the declarations explicitly mentioning this. The place of origin for the exports was stated as Montrose, where Baker Hughes has two premises.

The buyer of the exports was a contractor on the Arctic LNG 2 (liquefied natural gas) project in the western Siberia region of Russia, which is led by a Russian gas producer called Novatek...

Critics claim that equipment supplied by Western companies to Russia’s oil and gas sector has helped to support its economy and war efforts in Ukraine in the face of international sanctions.

The Scottish Greens said it would now ask the Scottish Government to review its business grants to firms to ensure they are not “profiting from the actions of human rights abusing dictatorships”.

Baker Hughes said it suspended new investments in Russia in March 2022 and has followed applicable laws...

Svitlana Romanko, director of Razom We Stand, told The Ferret: “Everyday in Ukraine we bury our brave innocent people, whose lives have been taken by Russia’s war machine, which is funded and fueled by fossil fuels. Despite global and Ukrainian calls to cut ties with Russia immediately after the start of the invasion, they have chosen to continue collaboration with the aggressor.”

Romanko said the Scottish government “should not turn a blind eye to such reprehensible business behavior”, arguing its role is to make sure that “businesses in its jurisdiction are not contributing to Russia’s ability to threaten the entire world, and to continue the onslaught in Ukraine”...

A spokesperson for Baker Hughes said: “Baker Hughes follows applicable laws including trade sanctions. We suspended new investments in Russia operations in March 2022. Our last shipment out of Montrose was in June 2022, and we halted all work supported by Scottish operations in July 2022. We communicated with Scottish Enterprise’s Sanction Team who confirmed they were comfortable with Baker Hughes’ position.”

A Scottish Enterprise spokesman said: “Scottish Enterprise moved swiftly to support the Scottish Government’s request for companies to take action to cease trade and investment activity with Russia. We have no role in sanctioning or approving exports by any company.”

The data for Baker Hughes’ exports was obtained by an investigative consultancy called Data Desk and Business4Ukraine, a coalition of civil society organisations that condemn the Russian military invasion.

Novatek was asked to comment.

Part of the following timelines

Ukraine: Global outrage over Russian invasion leads to sanctions, demands for businesses to divest

Ukraine invasion: Companies with interests in Russian oil & gas forced to reassess operations