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Article

28 Feb 2022

Author:
Ron Bousso,
Author:
Nerijus Adomaitis, Reuters

Western companies head for exit in Russia as sanctions tighten

Western companies head for the exit in Russia as sanctions tighten, 28 February

Energy giant BP, global bank HSBC and the world's biggest aircraft leasing firm AerCap joined a growing list of companies looking to exit Russia on Monday, as Western sanctions tightened the screws on Moscow over its invasion of Ukraine.

The West has moved to punish Russia with a raft of measures, including closing airspace to Russian aircraft, shutting out some Russian banks from the SWIFT global financial network and restricting Moscow's ability to use its $630 billion foreign reserves...

BP, Russia's biggest foreign investor, abruptly announced at the weekend it was abandoning its 20% stake in state-controlled Rosneft at a cost of up to $25 billion, cutting the British firm's oil and gas reserves in half and production by a third.

BP's decision, following British government talks, shone a spotlight on other Western companies with stakes in Russian oil and gas projects, such as ExxonMobil, TotalEnergies and Shell.

Equinor, the energy firm majority owned by the Norwegian state, said it would start divesting its joint ventures in Russia, although a spokesperson said: "It will take some time to untangle a business developed over decades."

Norway's sovereign wealth fund, the world's largest, will also divest its Russian assets, worth about $2.8 billion, while Australia's sovereign wealth fund said it planned to wind down its exposure to Russian-listed companies.

Large parts of the Russian economy will be a no-go zone for Western banks and financial firms after the decision to cut off some of its banks from SWIFT, a secure messaging system used for trillions of dollars' worth of transactions around the world...

Some Western companies were suspending operations while others were drawing up contingency plans as they reviewed the rapidly changing landscape for business with Russia...

Swedish automaker Volvo Cars will suspend shipments of cars to the Russian market until further notice.

Swedish telecoms group Ericsson said it was suspending deliveries to Russia while it assessed the potential impact of sanctions, according to an internal memo...

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