Equinor and Daimler Truck cut ties with Russia as Renault hit by factory disruption

Norway’s Equinor oil group and Germany’s Daimler Truck are terminating partnerships with Russian businesses while Renault has paused operations at one of its factories in the country as the corporate fallout of the invasion of Ukraine spreads.

Equinor, which is two-thirds owned by the Norwegian government, said it was “exiting” joint ventures in Russia that include a strategic partnership with state oil group Rosneft encompassing projects throughout Siberia.

Daimler Truck, the world’s largest truckmaker, said it had taken the decision to “immediately suspend all our business activities in Russia” even though its contract with local vehicle maker Kamaz limits co-operation to manufacturing civilian vehicles.

Their moves on Monday coincided with an announcement from Renault that it was halting operations at one of its Russian factories for a week, as the carmaker grapples with supply chain disruption.

Multinational companies with operations in Russia are grappling with the reputational impact of their association with the country as well as their potential exposure to powerful western sanctions designed to inflict severe economic pain on the country.

BP on Sunday said it was divesting its nearly 20 per cent stake in Rosneft, which took over most of the rival group business Yukos after a crackdown by President Vladimir Putin. Helge Lund, BP chair, described Russia’s invasion of Ukraine as an “act of aggression which is having tragic consequences across the region”.

Equinor chief executive Anders Opedal said: “In the current situation, we regard our position as untenable. 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. ”

He said Equinor was “deeply troubled” by Russia’s invasion of Ukraine and would “contribute funding to the humanitarian effort in the region”.

Equinor said it was expected to take impairments related to the ventures. The company has been in Russia for more than 30 years and expanded its partnership with Rosneft in 2020, paying $ 550mn to gain a 49 per cent stake in a dozen exploration and production licenses in eastern Siberia.

Equinor’s current production in Russia is modest at just 25,000 barrels of oil equivalent a day versus its group total of about 2mn barrels a day. It has 70 employees in Russia.

Norway’s government on Sunday ordered its $ 1.3tn oil fund, the world’s largest sovereign wealth fund, to ditch its $ 3bn in Russian investments.

Daimler Truck has operated a Russian joint venture with Kamaz for more than a decade through which its partner builds and markets Mercedes trucks and cabins. Separately, Kamaz, which was established under the Soviet Union, makes utility vehicles for Russia’s armed forces.

The move is unlikely to have a large impact on Daimler Truck’s profits, as the truckmaker sells just a few thousand units in Russia each year.

Mercedes-Benz AG, which in its previous guise as Daimler AG was the parent company of Daimler Truck, said it was also looking to divest a 15 per cent stake in Kamaz. The stake was supposed to be transferred to Daimler Truck when the company was spun off last year, but had not been done so because of delayed paperwork.

Following warnings from automakers that they could struggle to transport components into and out of Russia, Renault said it had temporarily closed its Moscow plant, which produces models such as the Renault Captur and its Arkana SUVs, because of supply chain problems.

Another of the French group’s factories operated by its Russian Avtovaz business also halted production on Monday, but that was down to semiconductor shortages, a spokesperson said. Manufacturing was due to resume there on Tuesday.

Russia is the Renault group’s second biggest market by sales volumes, while Avtovaz last year made up around 7 per cent of its overall revenues.