A message from our CIO, Scott Phillips:
“G’day Fools. If you’re like us, you’re dismayed by the events taking place in Ukraine. It is an unnecessary humanitarian tragedy. Times like these remind us that money is important, but other things are far more valuable. And yet the financial markets remain open, shares are trading, and our readers and members are looking to us for guidance. So we’ll do our best to continue to serve you, while also hoping for a swift and peaceful end to war in Ukraine.”
——–
The Origin Energy Ltd (ASX: ORG) share price has been wobbling this week as the company faces renewed pressure to cut indirect ties with a Russian oligarch.
It comes as previous moves to limit Russian interests in Origin’s Beetaloo Basin joint venture are criticised for not going far enough.
Earlier this week, Origin stated it is “appalled” by Russia’s invasion of Ukraine. In response, Origin pressured its joint venture partner, Falcon Oil & Gas Ltd. (TSX-V: FO.V) to have non-executive director Maxim Mayorets step down.
Mayorets represented Russian oligarch Viktor Vekselberg, who reportedly owns 16% of Falcon through his company, Lamesa Group Holdings. Mayorets resigned on 1 March.
But investor group, Australasian Centre for Corporate Responsibility (ACCR) is calling for Origin to suspend the venture.
At the time of writing, the Origin share price is $5.79, down 0.86% for the day.
Let’s take a closer look at the pressure facing the energy producer.
Origin share price wobbles amid pressure to suspend venture
Its been a rollercoaster of a week for Origin shares. They plunged 3.6% on Tuesday before surging 4.9% over Wednesday and Thursday.
Amid the craziness, the company has been facing calls to suspend its operations in the Beetaloo Basin.
Origin’s 77.5%-owned joint venture with Falcon is exploring the basin, which is a “key element” of the Australian Government’s gas-fired recovery plan.
Vekselberg’s Renova Group is currently sanctioned by the US Treasury Department.
In response to questions regarding Lamesa’s involvement with Falcon, Origin said it had put pressure on its JV partner. That pressure resulted in Mayorets’ resignation. But ACCR is advocating for more severe action. ACCR is asking Origin to pause the venture until Vekselberg’s interests are resolved.
ACCR director of climate and environment, Dan Gocher said Mayorets’ resignation is “simply window dressing”.
Gocher said:
Origin Energy may be hoping that the resignation of Maxim Mayorets from the board of Falcon Oil & Gas removes an undue influence on its joint venture in the Beetaloo Basin … [But] Vekselberg stands to personally benefit from any successful exploration that Origin is conducting in the Beetaloo Basin.
Origin has little choice but to suspend its joint venture with Falcon Oil & Gas until such time as Viktor Vekselberg’s interests in the company are resolved.
Origin has stated it has no direct contact with Lamesa. It also clarified Lamesa has no influence over the Beetaloo Basin operations.
Right now, Falcon doesn’t pay for exploration activities at Beetaloo. Additionally, there hasn’t been any production or earnings from the venture.
International energy giants back out of Russia
Last week, BP plc (NYSE: BP) announced it will exit its near-20% holding in Russia’s state-owned enterprise Rosneft.
Rosneft was previously touted as the “first and the most important focus area of BP’s business in Russia”.
Shell PLC (NYSE: SHEL) followed BP’s lead, announcing on Monday that it is backing out of its joint ventures with Russian energy corporation Gazprom.
As of the end of 2021, Shell had around US$3 billion of non-current assets in these ventures in Russia. It expects the process of exiting said assets will result in impairments.
Shell also plans to end its involvement in the Nord Stream 2 pipeline project.
Shell CEO Ben van Beurden commented on the decision, saying: “We cannot – and we will not – stand by.”
Finally, on Tuesday, Exxon Mobil Corp (NYSE: XOM) announced it is stepping away from the Sakhalin-1 venture, which it operates.
It also vowed to not invest in any more developments in Russia under the current circumstances.
The post Own Origin (ASX:ORG) shares? The company is facing pressure over Russian interests in its projects appeared first on The Motley Fool Australia.
Should you invest $1,000 in Origin right now?
Before you consider Origin, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Origin wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- All eyes on energy: Origin (ASX:ORG) share price surges 4%
- Why did AGL (ASX:AGL) shares smash Origin in February?
- Why is the Origin (ASX:ORG) share price edging lower today?
- Origin (ASX:ORG) share price lifts amid green hydrogen news
- Origin (ASX:ORG) share price slides 7% but UBS is still bullish. Here’s why
Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/hL9WTqd
Leave a Reply