BASFY BASF SE (QX)

By Mauro Orru and Pierre Bertrand

Russia is transferring the stakes that Germany's Wintershall Dea and Austria's OMV hold in a joint venture operating an oil, gas and condensate field in Western Siberia to a new entity, the latest seizures by the Kremlin of assets in which foreign groups still have interests.

President Vladimir Putin on Tuesday signed a decree under which the state effectively takes hold of Wintershall Dea's 35% stake and OMV's 24.99% interest in Severneftegazprom, a joint venture with Russian state-controlled gas giant Gazprom that operates the Yuzhno-Russkoye oil, gas and condensate field.

The decree said the move was in response to "threats to the national interests and economic security of the Russian Federation," a common phrasing found in presidential decrees after Russia's invasion of Ukraine and retaliatory sanctions from the West.

"The presidential decree is a further confirmation that Russia is no longer a reliable business partner and unpredictable - in every respect," a Wintershall Dea spokeswoman said Wednesday.

The spokeswoman added that Wintershall Dea is analyzing the situation in detail, without elaborating further. German chemicals giant BASF has a 72.7% stake in Wintershall Dea.

OMV said that it is also examining the decree and that it might "take further steps" to preserve its rights, without elaborating. It added that no further negative impacts were expected.

Kremlin spokesman Dmitry Peskov on Wednesday denied that the decree amounted to confiscating Western assets in comments carried by state news agency RIA Novosti.

Russia has already moved to seize Western assets in the energy sector. Last year, the Kremlin took control of the international consortium behind the giant Sakhalin-2 oil-and-natural-gas project that counted the likes of Shell and Mitsubishi among its shareholders, handing it to a Russian entity.

The latest move by the Kremlin highlights the risks to Western companies with interests in Russia more than a year after the war began. In April, Russia decreed that the state can take temporary control of assets of companies or individuals from what the Kremlin calls "unfriendly" states.

Earlier this year, Russia took control of the assets of Germany's Uniper and Finland's Uniper in the country, handing the stakes in their Russian subsidiaries to a government agency. In July, Russia appointed Chechnya's agriculture minister as the new head of Danone's business in the country and tapped a Russian businessman to run Carlsberg's operations there.

Write to Mauro Orru at mauro.orru@wsj.com and Pierre Bertrand at pierre.bertrand@wsj.com

(END) Dow Jones Newswires

December 20, 2023 08:04 ET (13:04 GMT)

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