Baker Hughes leaves Russia
Baker Hughes has withdrawn its extensive business interests from Russia in response to the situation in Ukraine. The company has been particularly active in massive Russian pacific projects such as Sakhalin LNG, Arctic LNG and Yamal LNG. This represents a massive investment as well as the potential for major orders in the future.
But the company is following other major oil & gas providers such as Halliburton, Schlumberger, ExxonMobil, Shell, and BP, as well as other western businesses as part of the embargo on Russia. The statement by Baker Hughes CEO Lorenzo Simonelli said that the company has suspended new investment in Russia operation to comply with sanctions but will fulfill current contractual obligations.
“The crisis in Ukraine is of grave concern, and we strongly support a diplomatic solution," said Simonelli.
These moves present interesting long-term prospects for the oil & gas field. Eastern Russia has been a huge market for LNG trains over the past decade. Billions have been invested in projects there, some now operating and others yet to come online. With demand for LNG soaring, it remains to be seen who will be willing to buy Russian LNG, and who will come forward to help complete these projects if the conflict drags on. China would seem to be the obvious candidate. But note in the announcement from Baker Hughes that the company will fulfill current obligations. Those commitments will take years to conclude.
