ConocoPhilips divests stake in Russian joint venture, exits Russia after 25 years

Selling its 50 per cent in a joint venture with Rosneft, ConocoPhillips has exited Rusia after nearly 25 years, according to media reports yesterday.

ConocoPhillips reportedly sold its stake in the Polar Lights joint venture with Russian state oil company OAO Rosneft to Trisonnery Asset Ltd for an undisclosed amount.

Rosneft is also reported to have sold its 50-per cent stake in the joint venture last week.

The Polar Lights joint venture, focused on the far north-west of Russia, had recorded a fall in total oil production.

The fall in oil prices and the impact of political tensions on Russia's energy sector had also reportedly prompted ConocoPhillips' decision to exit Russia.

ConocoPhillips had been looking to sell non-core assets and cut costs with the falling crude oil prices. ConocoPhillips said in early December, that it expected about $2.3 billion of non-core asset sales.

Included in the figure was around $0.6 billion from transactions that closed through the first three quarters of 2015. The remaining $1.7 billion represented transactions with definitive agreements in place that were expected to close in the fourth quarter of 2015 or the first quarter of 2016.

The Financial Times had first reported the sale.

Western oil firms had made a dash to Russia, after the fall of communism hoping to cash in on the vast reserves of oil and natural gas.

According to the International Energy Agency, Russia continued to be the world's second-largest oil producer and second-largest oil exporter.

A number of energy majors had left or dramatically scaled back as energy assets had been effectively moved back under state control or were with people with close ties to the Kremlin.

Further, the collapse of the Russian rouble had made the investments more financially risky, with western sanctions on Russia over Ukraine queering energy deals.

Furthermore, the fall in oil prices had forced several oil giants, including ConocoPhillips to scale back investments and jobs this year.