Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict
Oil field serveries firm Baker Hughes agreed to divest its oilfield services (OFS) business in Russia to its local management team.
The financial and other terms of the deal have not been disclosed.
The deal comes months after the US-based company announced its plans to halt new investments in its Russian operations following the invasion of Ukraine by Russian troops.
Baker Hughes said that the new business will be operated independently and will take up all the exiting Russian OFS liabilities, assets, and commercial obligations.
Subject to the approval of local authorities, the transaction is planned to be completed in the second half of this year.
The firm said in a statement: “The company is committed to supporting its employees throughout this process and ensuring an orderly transfer for its customers and relevant parties.”
Last month, Baker Hughes reported a $426m non-operating loss related to its oilfield services unit in Russia at the end of the second quarter of 2022.
The unit’s revenue declined 51% to $60m, leading to “meaningful cost under-absorption,” the company said.
The company also took a $365m charge in Q2 for the suspension of all oil drilling and other works in Russia.
Amid sanctions on Russia by the Western nations, Russian gas producer Gazprom halted gas supplies to Latvia last week due to non-compliance with supply conditions, reported Reuters.
Russia has already ceased gas supplies to Bulgaria, Poland, Finland, Netherlands, and Denmark due to their refusal to pay for gas in rubles.