Russia's President Vladimir Putin has issued decrees granting the government to seize and forcibly sell multi-billion-dollar energy assets from European companies considered "unfriendly" to new state-approved owners. 

(Photo : ALEXANDER ZEMLIANICHENKO/POOL/AFP via Getty Images)
Russian President Vladimir Putin holds his year-end press conference at Gostiny Dvor exhibition hall in central Moscow on December 14, 2023.

Russia Targets European Companies Considered 'Unfriendly'

In the presidential decrees published late Tuesday, the Kremlin ordered the creation of new Russian companies that will take shares in the Yuzhno-Russkoye oil and gas field currently owned by Austria's OMV and Germany's Wintershall Dea.

According to Politico, OMV and Wintershall are reportedly both from countries that Russia deems "unfriendly" as they limit their ties with Moscow after its full-scale invasion of Ukraine. The two European energy giants jointly possess a 60% stake at the drilling site in the icy far north of Russia.

Under Vladimir Putin's decree, all corporate agreements previously in force are no longer valid, and the sales proceeds will go to special accounts owned by their former foreign owners.

Although the firms will be compensated for their investment, the Russian state will determine the amount they will receive from the sale. This move reportedly marks the biggest asset seizure in the recent history of Russia.

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No Investment Safety in the Regime of Vladimir Putin

The absence of legal safeguards for foreign companies in Russia has been underscored by figures such as Mikhail Khodorkovsky, a former Russian oil and gas tycoon who experienced the dismantling of his energy empire and imprisonment due to his opposition to Vladimir Putin. 

Khodorkovsky earlier told Politico that there were now no legal protections for foreign companies in Russia.

"There are no guarantees for the safety of investments anywhere, but Vladimir Putin's regime has demonstratively built an illegitimate and lawless state," he noted.

Since the onset of the Ukraine conflict in February 2022, many Western energy companies, including United States' Exxon Mobil and Norway's Equinor, have announced their total withdrawal from Russia, while other firms like Shell, BP, TotalEnergies, and Wintershall have faced difficulties in winding down their business in the country and returning their funds.

Russia has already confiscated assets owned by some major Western companies like Danone and Carlsberg following their decisions to leave the Russian market.

READ MORE: Vladimir Putin: Russia Becoming 'New Global Growth Center' Despite Western Isolation