Moody's mulls downgrading Wintershall Dea's rating

Credit ratings agency Moody's announced on March 4 it had placed German gas company Wintershall Dea and its subsidiaries on its review list, given its exposure to the Russian market.

The move follows Moody's announcement it is considering a downgrade of Russia's B3 sovereign rating.

Wintershall has partnerships with Russia's state-owned Gazprom at the Yuzhno-Russkoye and Achimov gas projects in Siberia, and these account for nearly half of the 440,000 barrels of oil equivalent/day that Wintershall produces. Sanctioned Russian oligarch Mikhail Fridman also has an interest in Wintershall through his LetterOne group, although the stake is not sufficiently large for sanctions to affect the gas producer's operations.

Wintershall's activities in Russia "expose the company to potential indirect or direct sanctions on or from Russia," Moody's said in a comment. Because of comparatively weaker oil and gas prices in Russia, though, its business there only accounted for 20% of its EBITDA and 24% of its free cash flow in 2021, Moody's said.

Other properties of Wintershall include a 15.5% stake in the Nord Stream 1 pipeline that pumps Siberian gas to north Germany, whose majority owner is Gazprom. Wintershall also holds an interest in a German gas pipeline network, WIGA Transport Beteiligungs, and a German subsidiary of Gazprom.

Wintershall has spoken out against Russia's invasion of Ukraine, but has signalled it will retain its interests in the country for the time being. In contrast, BP, Equinor, ExxonMobil and Shell have all announced their intent to withdraw from Russia because of its actions in Ukraine.