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Highlights
- Russia’s invasion of Ukraine has led to many global companies making an exit from Moscow.
- Their decision to exit Moscow is in line with the Western economic sanctions on Russia.
- Energy giant BP, global bank HSBC, and aircraft leasing firm AerCap are some of the big names to have made the exit.
Russia’s invasion of Ukraine has triggered a mass corporate exodus from Russia as several global firms exited Moscow amid a slew of sanctions imposed by the US and European Union.
The list of companies is expected to further expand as Russian President Vladimir Putin’s troops continue to attack Ukraine on several fronts.
Here are some of the big names which have exited Russia so far:
Energy companies
BP
Russia's biggest foreign investor BP recently announced its decision to abandon its 20% stake in Russian oil giant Rosneft. With this, the British firm ended its three decades of stay in the energy-rich country. The decision could cost BP over US$25 billion and is expected to reduce its oil and gas reserves in half and cut production by a third.
Shell
Shell has announced its exit from all its Russian operations, including a major liquefied natural gas (LNG) plant. The company will quit the flagship Sakhalin 2 LNG plant in which it owns a 27.5% stake, Shell said in a statement on Monday. The Sakhalin 2 LNG plant is 50%-owned and operated by Russian gas giant Gazprom.
Image source: © Aquir | Megapixl.com
Equinor
The energy firm, which is majority owned by the Norwegian state, has announced its plans to divest its joint ventures in Russia. “We will now stop new investments into our Russian business, and we will start the process of exiting our joint ventures in a manner that is consistent with our values,” said Equinor Chief Executive Officer (CEO), Anders Opedal.
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Banking & Finance
HSBC
British bank HSBC has started to restrict relations with a host of Russian banks. It includes the second-largest Russian bank VTB, which is among the ones targeted by the economic sanctions.
In addition, French multinational investment bank Société Générale and South Korea’s Shinhan Bank are also winding down their relations with the Russian banking institutions.
Even US-based payment card companies such as Visa and Mastercard have banned several Russian financial institutions from their network.
Automobile
- American motorcycle manufacturer Harley-Davidson has suspended its business in Russia.
- Similarly, Swedish automaker Volvo has announced halting its sales and production in the country.
- Germany’s Daimler Truck has frozen its business activities in Russia.
Aircraft & Shipping
AerCap
The world’s biggest aircraft leasing firm, AerCap, has also shared its plans of suspending leasing activity with Russian airlines.
Maersk
Shipping giant Maersk has temporarily halted all container shipping deliveries to and from Russia.
In addition, Norway's US$1.3-trillion sovereign wealth fund, the world's largest, has divested its Russian assets worth about US$2.8 billion. Several Australia's sovereign wealth fund have also shared their plans to cut down their exposure to Russian-listed companies.
Economic sanctions on Russia
A range of economic sanctions imposed by the Western countries on Moscow in the recent days is expected to financially dent the Russian economy. So far, the Western world has closed airspace to Russian aircraft, pulled down a few Russian banks from SWIFT global financial network and capped Moscow's ability to deploy its US$630 billion foreign reserves.
As a result, the rouble has fallen nearly 30% to an all-time low. The Russian central bank, which itself is weighed down by some restrictions, has doubled its benchmark interest rate to 20%. Furthermore, it has closed down the stock markets and derivative markets and temporarily banned brokers from selling securities held by foreigners.
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