Wintershall Dea writes off Nord Stream 2 financing, halts new Russia projects

Germany's Wintershall Dea has decided to write off its investments in the stalled Nord Stream 2 gas pipeline and vowed not to implement new upstream projects in Russia in the wake of Moscow's invasion of Ukraine, the company said March 2.

In a statement, Wintershall Dea said its board had also decided "to basically stop payments to Russia with immediate effect."

"Wintershall Dea's management board has decided not to advance or implement any additional gas and oil production projects in Russia and to write off its financing of Nord Stream 2 totaling around Eur1 billion [$1.1 billion]," the company said.

A company spokesperson told S&P Global Commodity Insights that the Eur1 billion write-off was just in relation to Nord Stream 2.

Wintershall Dea helped finance the 55 Bcm/year Nord Stream 2 pipeline along with Shell, France's Engie, Austria's OMV, and Germany's Uniper.

The pipeline was completed in September and filled with gas, but the US imposed sanctions on Switzerland-based operator Nord Stream 2 AG and its corporate officers on Feb. 23, a day before Russia began its invasion of Ukraine.

Companies had until March 2 to wind down any transactions involving Nord Stream 2 AG or its subsidiaries to avoid the impact of the sanctions.

The sanctions came after German Chancellor Olaf Scholz on Feb. 22 said the certification process for Nord Stream 2 AG had been suspended indefinitely pending a review of Germany's gas supply security.

Wintershall Dea is also a 15.5% shareholder in Nord Stream AG, the operator of the first 55 Bcm/year Nord Stream pipeline system that started up in 2011.

Learn more about the history of the Nord Stream 2 project:

Russian upstream

Wintershall Dea CEO Mario Mehren had said March 1 that the foundation of the company's work in Russia had been "shaken to the core" by Moscow's "brutal" attack on Ukraine.

Mehren said the Russian President was "waging a war of aggression against Ukraine."

"Wintershall Dea has been working in Russia for more than 30 years. We have built many personal relationships -- also in our joint ventures," he said.

"However, the foundation of our work in Russia has been shaken to the core," he said.

In its statement March 2, the company said its management board had also decided to stop all planning for new projects in Russia where it is involved in three upstream ventures.

It has a 50% stake in the Achimov 1A block at the Urengoy field in northern Russia -- one of the world's largest gas reservoirs -- as part of its Achimgaz joint venture with state-controlled Gazprom.

It also has a 25% stake in Achim Development, which produces gas from the Achimov 4A and 5A blocks, where production began in January 2021.

Wintershall Dea has said previously that the Achimov 4A and 5A projects were central to its plans to grow its gas-focused production in Russia and build on its existing partnership with Gazprom at the Achimov 1A block.

The third onshore project involving the German company is the Yuzhno-Russkoye field in Western Siberia.

Wintershall Dea has a 35% stake in the Severneftegazprom joint venture, which started to operate the giant field in 2007 and has been producing around 25 Bcm/year of gas at plateau since 2009.

North Sea venture

Wintershall Dea also has an upstream joint venture with Gazprom focused on the Dutch sector of the North Sea.

Since 2015, Wintershall Noordzee is a 50-50 JV between Wintershall Dea and Gazprom, and operates more than 20 offshore production installations and six subsea wells.

In recent years, the JV has also further expanded its operated portfolio to the continental shelves of Germany, the UK, and Denmark, it says on its website.

Wintershall Dea also works with Gazprom in an upstream venture in Libya.