Wintershall Dea Looks to Domestic Production as Russia has 'Destroyed' Trust

Germany's Wintershall Dea, a shareholder of the Nord Stream 1 pipeline and longstanding Gazprom partner, on Tuesday said it would look to increase domestic oil and gas output since Russia has lost its status as a reliable energy supplier.

If Europe wants to reduce its dependence on imports it has to look at domestic energy supplies, Chief Executive Mario Mehren told journalists after second-quarter results showed adjusted net income up 262% at 608 million euros ($618 million).

"Even if some people may find it difficult at first to step out of their comfort zone and accept this consequence of the current crisis, we need more domestic production again," Mehren said.

The CEO said the company, which is co-owned by BASF and Russian billionaire Mikhail Fridman's investor group LetterOne, was analyzing all options to increase production from its German fields as quickly as possible.

"Over the least couple of weeks, Gazprom, with the reductions and disruptions of supply, has destroyed the trust in Russia as a reliable supplier of energy for Europe," Mehren said. "A trust that has been built over decades, and that is a very depressing news I have to say."

Mehren said Wintershall Dea had no plans to sell its 15.5% stake in Nord Stream 1 and it would continue to operate its joint ventures in Russia, including the Yuzhno-Russkoye gas field, in which it owns 35%, with Gazprom and OMV OMVV.VI owning 40% and 25%, respectively.

Wintershall Dea will also keep its holdings in the Achimov natural gas production projects in Siberia, which include Achimgaz - a 50-50 joint venture with Gazprom - and Achim Development, in which Wintershall Dea holds 25%.

Walking out of Russia would be a big gift for the government in Moscow, said Mehren, who added that the company had a legal obligation to protect the value of its assets in the country.

(Reuters)