Russia – Wintershall Dea aims to entirely quit Russia in accordance with all applicable rules and regulations, following the Supervisory Board’s approval of the Management Board’s principle decision to exit.
CEO Mario Mehren: “Wintershall Dea will end its Russian activities. Continuing to operate in Russia is not tenable. Russia’s war of aggression in Ukraine is incompatible with our values and has destroyed co-operation between Russia and Europe.”
Wintershall Dea came to the conclusion that it no longer satisfies the IFRS requirements for having control or significant influence over its joint ventures in Russia. Wintershall Dea thus deconsolidated all of its Russian participations in Q4. The Russian participations will be recorded as financial assets valued at fair value in accordance with IFRS 9 up until the desired exit is finished.
Financial impact
Following the deconsolidation, Wintershall Dea will no longer report changes in the fair value of the financial assets in its group financial statements, in addition to any financial or operational KPIs (including production and reserves) of the Russian joint ventures.
The external interference into the business models of the Russian joint ventures, including, among others, the Russian Presidential Decree No. 943 dated December 22, 2022, and the Russian Government Decision No. 2544 dated December 30, 2022, which retroactively lowers the prices at which the joint ventures can sell their produced hydrocarbons to Gazprom, has a significant impact on the fair value of the Russian joint ventures. As a result, the company anticipates recording a non-cash loss from the deconsolidation of the Russian joint ventures that, when added to other impairments related to Russia, particularly those relating to its participating interests in Nord Stream AG and WIGA Transport Beteiligungs-GmbH & Co. KG, totals about €5.3 billion.
Wintershall Dea has prudence altered its financial framework and omitted Russian operations from its planning perimeter since the commencement of the war in Ukraine.
