EXPOSURE OF MAJOR WESTERN COMPANIES IN RUSSIA

The listing here below is not exhaustive. It highlights the exposure of major companies by countries active in Russia that could suffer from a further deterioration of trade relations. Already sanctions are taking a toll on business.  

Austria

• Raiffeisen Bank has €18bn of loans to Russia and Ukraine
• Erste Group is warning that the turmoil could impact banks in eastern Europe.

Denmark

• Carlsberg generates nearly 40 per cent of its earnings from its operations in Russia.

France

• Total, the French major, owns a fifth of Yamal LNG, a huge LNG project in the north of Russia. Total has frozen its purchases of shares in Russia’s second-largest ntural gas producer Novatek. 
• CGG, a French seismic surveyor, could also be affected by the sanctions because its technology is used to map oil and natural gas reserves. The company has data on the Russian Arctic.
• Peugeot Citroen auto sales are declining. 
• Avtovaz controlled by RenaulNissan has a 29 per cent share of the Russian market in 2012, by far the largest of any foreign group
• Danone generated ten per cent of its sales in 2012 to Russia, its largest single market.
• Société Générale second quarter profits at its Russian unit have fallen 36%.

Finland

• Fortum, Finland’s biggest utility company, owns OAO Fortum, and a minority stake in TGK-1 Fortum. About a quarter of its 2016 earnings are projected to come from Russia.

Germany

• Germany is Russia‘s second-biggest trade partner, after China, with companies such as Siemens, ThyssenKrupp and Volkswagen active investors in the country.
• Siemens indicates that the current situation poses serious risks for Europe’s growth this year and next. 
• Volkswagen has 6 per cent share of the Russian market and their operations are suffering. It has recorded an 8% drop in its car sales in Russia in the first six months of this year.
• Adidas also warns  their Russian operations are suffering. The company is shutting stores and scaling back expansion in Russia. It slashed its 2014 earnings forecast by 20% to 30% partly because of Russia. 
• E-ON owns controlling stakes in locally listed subsidiaries. E-ON projected 10% of 2016 earnings to come from Russia.
• German-based retailer Metro has about $2 billion invested in Russia, but sales in Eastern Europe collapsed by 14 percent between April and June. Metro had planned to take its Russian subsidiary Cash & Carry public this year, but has postponed because of the weakening ruble.  

Italy

• ENI signed a joint venture agreements with Rosneft to explore for oil in Russia’s Arctic,
• ENEL owns controlling stakes in locally listed subsidiaries. 3% of 2016 earnings are  projected to come from Russia.

Netherlands

• Royal Dutch Shell has a stake in the huge Sakhalin 2 liquefied natural gas project in the Russian Far East. It is also a partner with Gazprom Neft, the Russian gas group’s oil arm, in the Salym oilfield in Siberia, and is working on joint projects in the Russian Arctic.

Norway

• Statoil signed a joint venture agreement with Rosneft to explore for oil in Russia’s Arctic

Switzerland

• Glencore Xstratathe Swiss commodities trader, has a $5bn oil-for-cash deal with Rosneft and has lent $2bn to Russian oil company Russneft.

United Kingdom

• The UK’s BP is the most exposed to Russia of the oil super-majors. In 2012 the company sold its stake in TNK-BP, one of Russia’s largest oil producers, to Rosneft  in a deal that left it with nearly a fifth of the Russian national oil champion. In the fourth quarter Rosneft contributed $1bn to BP’s underlying profit – 35 per cent of the total.

USA

• Exxon has a joint venture agreements with Rosneft the state-controlled oil champion for developing tight oil in Siberia, exploration in the Arctic Kara, Chukchi and Laptev seas. ExxonMobil is the US oil company with the largest Russian operations, and has been an investor there for 20 years. It operates and has a 30 per cent stake in the Sakhalin 1 offshore oil and gas project in Russia’s far east, which produced 145,000 barrels of crude per day in 2012. Exxon was expected to spend $51.7 billion in Russia this year.  Rosneft also, last year, took a 30 per cent stake in 20 exploration blocks operated by Exxon in the Gulf of Mexico.
• General Electric the industrial and finance group, is another US company that has been growing fast in Russia. It has annual revenues of more than $1bn in Russia, selling products such as equipment for the oil and gas industry, power generation and aero-engines.
• General Motors has a 7 per cent share of the Russian auto market but sales are decreasing
• Ford auto sales are decreasing
• Boeing Co.,might see manufacturing costs rise if the imbroglio disrupts its access to titanium, a light-weight metal favored for jet aircraft such as its 787 Dreamliner. VSMPO-AVISMA, a Russian titanium producer, provided 35 percent of the supply used by Boeing’s commercial airplanes unit.
• Mc Donald is running into trouble with Russian regulators, who have accused the company of misrepresenting the nutritional value of its food.
• Wendy’s (in Russia since 2011) is quitting the country, blaming a change in management at its local partner Wenrus. 
• Visa and Master Card are facing the prospect of tighter restrictions on the way credit card companies can operate in Russia as the Russian government considers its own national payments system in response to earlier US sanctions.
• Bank of America has almost halved its exposure to Russia this year to $ 3.9 billion.