If President Trump is successful in bringing a peace between Ukraine and Russia, one of the affects will the scrapping of economic sanctions the western countries have placed on Russia. If one looks at Russia from an economic point of view, it has tremendous oil and gas reserves. There was a reason why Russia was the favored country by Europe to buy oil and gas. The infrastructure is in place and the government needs to sell oil and gas to recover the Russian economy.

In an article by Stanley Reed of the New York Times News Service, the question is will western companies rush in when sanctions are lifted. At one time, Pepsi out sold Coca-Cola in Russia, will they come back?

Before the sanctions were put on, and after the USSR fell apart the 3 biggest players in the Russian oil and gas fields were BP, Shell and ExxonMobil.

ExxonMobil was working in Russia’s far east near Sakhalin Island and worked on it for over 20 years. However, in a 2023 regulatory filing, it wrote off the project of $4.6 billion as management deemed the carrying value of the asset not recoverable. During this 20-year period, ExxonMobil was considered to have a relatively good relationship with its Russian partner Rosneft, the state-controlled oil company.

The energy giants, whose projects take years to complete, would also need to be convinced that they would not wind up facing new restrictions in a few years in the event of a change in the government in the US or renewed aggression by Russia.

Tatiana Mitrova, a research fellow at Columbia University’s Center on Global Energy Policy asked why would the majors rush back in when they have attractive opportunities in the world including Gulf of Mexico near Guyana and Brazil?

One company that could go back to Russia is TotalEnergies of France. The company wrote off $14.2 billion on its Russian business in 2022 and has continued to import LNG from a facility called Yamal that it helped develop in the Russian Arctic with Novatek, a Russian company which Total owns 19% stake.

Smaller companies such as SLB formerly Schlumberger, as a company that continues to work in Russia providing training and hydraulic fracturing and other supports.

Linking to dividend paying stocks, all companies operating outside of borders see markets and opportunities and with it comes global risks. Sometimes the risks are in favor of the company, sometimes it against, but where do they see opportunity to maintain margins?

There are more questions than answers, till the next time – to raising questions.