The world's biggest oilfield contractors are quitting future Russia work

HOUSTON (BLOOMBERG) -The world's three biggest oilfield service providers are halting future work in Russia in response to President Vladimir Putin's invasion of Ukraine, announcing their decisions separately and within 24 hours of each other.

Baker Hughes on Saturday (March 19) became the latest, saying it is suspending new investments in Russia operations but continuing with existing work there, according to a statement.

That followed a similar statement by Schlumberger late on Friday, when the world's biggest oilfield contractor immediately cut any new investment in one of the biggest oil-producing nations while leaving existing work there in tact.

"The crisis in Ukraine is of grave concern and we strongly support a diplomatic solution. We condemn violence and our hearts go out to the people and families of those impacted," Baker Hughes chief executive Lorenzo Simonelli said in the statement.

Halliburton, the world's top provider of fracking services, is the only oilfield contractor to halt current and future work in Russia, a country whose oil sector relies on foreign technology, gear and expertise to sustain domestic output of the Kremlin's key sources of revenue.

Halliburton followed some of the largest oil explorers, including BP and Shell , in announcing plans to abandon Russia.

Baker Hughes, which generates as much as 5 per cent in total sales from Russia, received approval from its board of directors earlier in the week, according to a person familiar with the matter who asked not to be identified.

The Houston-based company has been operating under a halting-new-investments model for the past few days, said the person, who was not authorised to speak about the matter publicly.

A representative for Baker Hughes declined to comment.

Spending on fossil-fuel exploration in the region that includes Russia and the former Soviet Union was already expected to grow at a slower pace than the rest of the world, Evercore ISI said in December.

Schlumberger said earlier this month that it will take an earnings hit from the combined effects of Russia's attack on Ukraine and an increasingly snarled global supply chain. Baker Hughes has the second-highest exposure to Russia, after Schlumberger, analysts say. Halliburton generates about 2 per cent of its sales from Russia, according to JPMorgan Chase.