By Vera Eckert
FRANKFURT (Reuters) -Wintershall Dea will cut some 500 jobs, or roughly a quarter of its staff, in a separation of its Russian activities, the oil and gas group said on Tuesday, drawing a line under the business on which it has relied for decades.
Some 300 of the affected 500 jobs are in Germany, the group said.
The company, a joint venture of BASF and Russian billionaire Mikhail Fridman's investment firm LetterOne, spoke of "new realities" since Moscow invaded Ukraine, causing it to de-consolidate its Russian activities. The group has been one of the most exposed German firms there with Russia accounting for half of its production.
"We have adjusted our corporate strategy in line with the changing energy sector and our exit from Russia and we are now refocusing our organisational structure accordingly," Chief Executive Mario Mehren said in a statement.
The move comes as Germany is phasing out its energy relations with Russia, once the backbone of bilateral ties, which has also affected gas trader Uniper.
Wintershall Dea, which majority shareholder BASF is seeking to exit, aims for 200 million euros ($214 million) of annual cost savings, it said.
The shedding of jobs will be carried out in a socially responsible way, the statement said, adding the group's management board would also be reduced to three from four.
It will in future consist of Mehren, Chief Operating Officer Dawn Summers and CFO Paul Smith, while chief technology officer Hugo Dijkgraaf is to leave at the end of November. The board member for Russia, Thilo Wieland, already left earlier in 2023.
All activities with Russian participation, including Wintershall Dea's stake in the Nord Stream pipeline as well as joint ventures with Gazprom (MCX:GAZP), are to be legally separated by mid-2024.
Wintershall Dea will make a provision of 225 million euros in third quarter 2023 for the implementation of the restructuring plans, it said, adding it would disclose more details at a media call scheduled for Sept. 6.
Kassel, its legacy location, will become the sole headquarter although the Hamburg office, inherited in the merger with Dea in 2019, will continue to serve as a location.
Internationally, the company will pull together business units in Algeria, Egypt, Libya and the United Arab Emirates under one regional unit, while maintaining offices in Cairo, Abu Dhabi and Tripoli.
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