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The chief executive of Wintershall Dea has warned of European “complacency” over energy security in the wake of the escalating war in Gaza, as the German company continues to grapple with the loss of its Russian gasfields.
Mario Mehren on Monday said Europe faced a “fragile situation with multiple potential supply risks, including the current Middle East conflict,” adding that policymakers and industry alike should be aware of “winter looming”.
His comments came as Wintershall, which is majority owned by chemical group BASF, embarks on a cost-cutting programme after the Kremlin in January expropriated its joint ventures in Russia — which before the war made up half of its output — and confiscated €2bn from its bank accounts.
The loss of control over its Russian business prompted Wintershall to announce in January that it would exit the country, having been one of the last western oil and gas explorers to continue doing business there after the invasion of Ukraine. The decision led to a €5.3bn writedown of its business, as well as the deconsolidation of its Russian assets.
Wintershall said on Monday that it would complete the “legal separation” of its remaining energy exploration and production, carbon management and hydrogen businesses from its Russian assets — including its stake in the Nord Stream pipeline as well as its joint ventures with Kremlin-controlled Gazprom — by mid-2024.
The company’s oil and gas revenues in the first nine months of 2023 nearly halved compared to the same period last year, reaching €7.4bn. In the quarter ending September, the company reported a net loss of €535mn, compared to a €388mn profit in the same period last year.
Wintershall has in response to its crisis announced 500 job cuts — roughly a quarter of its workforce — as it will seek to save €200mn a year.
Aside from the loss of its Russian business, Wintershall blamed lower oil and gas prices as well as impairments worth €587mn, most of which came from its 10 per cent stake in an offshore gas project in the United Arab Emirates.
In January, BASF was forced to write down its stake in Wintershall by €6.5bn. Even before the war, the chemicals group had been trying to divest Wintershall but faced opposition from minority shareholder LetterOne, the London-based investment company that was founded by two now-sanctioned Russian oligarchs including Mikhail Fridman.
