Halliburton Says It Must End Some Contracts in Russia by May 15 on Sanctions

(Bloomberg)

Halliburton Co. said that sanctions imposed by the U.S., the EU and others require the company to wind down certain contracts in Russia by May 15.

The company also said that the total net book value of its assets in Russia is about $340 million, and warned that the invasion of Ukraine and related sanctions could cause the company to take a charge related to those assets.

Trade restrictions are blocking Halliburton’s ability to export, re-export and move some equipment within Russia, according to company filings.The Biden administration moved last month to tighten export controls on oil and natural gas equipment as part of a bid to “degrade Russia’s status as a leading energy supplier.” Affected equipment includes a slew of gear used in conventional and shale wells, including drilling rigs, hydraulic fracturing software, high-pressure pumps and drill pipe.

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The administration also targeted refining technology by imposing restrictions on the export, re-export or in-country transfer of equipment used for gas separation, hydrogen generation and sulphur recovery.

The U.S. Bureau of Industry and Security formally changed official policy to deny the export of oil extraction and refining gear, though it could grant licenses when deemed necessary for health and safety protection.

The world’s three biggest oilfield contractors pledged last month to halt future work in Russia, as existing sanctions — and the threat of more — could erode sales in the country. Schlumberger on Friday raised the prospect that additional sanctions would be imposed on the nation and Baker Hughes Co. warned investors earlier in the week that sales in one of the world’s biggest oil-producing nations would continue to erode.