Russian President Vladimir Putin has ordered that Germany's Wintershall Dea and Austria's OMV be stripped of multi-billion-dollar stakes in gas extraction projects in Russia's Arctic.
Under the presidential decrees published late on Tuesday, stakes held by OMV and Wintershall Dea in the Yuzhno-Russkoye field and in the Achimov projects are to revert to newly created Russian companies.
The Kremlin's biggest seizure of foreign assets in Russia comes after what Putin casts as a declaration of economic war by the West over Russia's decision to send thousands of troops into Ukraine in February 2022.
Russian entrepreneurs have gained control over some major Western assets in Russia including Carlsberg's eight breweries as well as French yogurt maker Danone's enterprises.
Hundreds of billions of dollars worth of Russian state assets have been frozen in the West as have the assets of Russian businessmen and investors. Germany last year took control of a major Russian-owned Schwedt oil refinery which supplies 90% of Berlin's fuel.
The Putin decrees formalize a loss of control that BASF and Wintershall Dea have flagged since January 2023. The decrees said the move was to safeguard national interests amid the illegal and unfriendly actions of the West in relation to Russian assets.
BASF and Wintershall Dea have said that Wintershall Dea's Russian assets, which accounted for about half its production, have been effectively expropriated by the state and needed to be written off.
Wintershall Dea, a joint venture between BASF and Russian billionaire Mikhail Fridman's investment firm LetterOne, is in the process of exiting Russia. OMV pulled out last year.
BASF said on Wednesday that the company learned of this information from the news and were currently analyzing the situation in detail.
The company reported a net loss in 2022 hurt by a 7.3 billion euro impairment caused largely by the deconsolidation of Wintershall Dea AG in Russia.
OMV initially expected to incur losses of 1.5 billion-1.8 billion euros ($1.64-$1.97 billion) from the Russian pullout.
All activities with Russian participation, including Wintershall Dea's stake in the Nord Stream pipeline as well as joint ventures with gas producer Gazprom are to be legally separated by mid-2024.
Both the Yuzhno-Russkoye field and the Achimov projects are located in the Yamal-Nenets region in Russia's far north.
According to the decrees, the stakes in the Achimov projects are to be transferred to specially set up limited liability companies and subsequently offered for evaluation and sale to a little-known company called Gazovyye Tekhnologii.
OMV's assets will be subsequently sold to the joint stock company SOGAZ, which provides insurance to Gazprom.
Proceeds from the sales will be placed in special accounts owned by their former foreign owners.
All corporate agreements previously in force are no longer valid, according to the decrees.