Almost 10 months have passed since Vladimir Putin unleashed a full-scale military invasion in Ukraine, which has developed into the desperate attempt to break Ukraine’s independence at any costs for Russia – human, economic and political. The invading Russian army has already lost almost 100,000 soldiers, and they've killed tens of thousands of Ukrainian civilians and defenders. But the imperial maniac Putin doesn’t count lives, and on the economic side, his costs so far have been successfully covered through revenues from oil and gas extraction and exports, which are enabled by international energy companies and banks, who made a very bad bet decades ago.
The chain of events that has brought the world to its perilous state today with escalating climate crisis, energy poverty, rise of petro-dictators and autocracies and the collapse of the international rules-based order, signaled by the invasion of Ukraine, have started back in the 1990-ies with very bad choices to make profits on Russian oil and gas, irrespective of moral consequences.
Banks and energy companies have ignored evidence of Putin’s deep criminality and his disregard for life and the Geneva Conventions, which were clearly visible in his war in Chechnya more than two decades ago and escalating through time. Oil companies like BP, Shell and Exxon were starting their business cooperation with Putin knowing who they deal with. Killings of journalists, political opponents and false flag acts of terror were his methods. After the bombings in 1999 of four apartment blocks in Moscow and two other cities in which hundreds died – attacks that many observers believe were the responsibility of Russian security forces – Putin cemented his leadership by flattening the Chechen capital Grozny the following winter, killing tens of thousands of civilians.
Now Global Witness rightly point out that by doing business with Putin’s regime for decades, international oil and gas companies are doubly complicit in Russia’s genocidal war in Ukraine, with all its atrocities:
Firstly, payments for oil and gas helped to fund and enable the Russian military assault. Taxes and dividends from oil and gas companies contributed a massive 45% to the Russian federal budget in 2021. Revenues from oil and gas projects backed by European and U.S. companies have fueled Putin’s regime to the tune of nearly $100 billion since 2014, and still do so at the rate of more than 500 million euro per day.
Secondly, their provision of technology and expertise has enabled the development of colossal oil and gas fields that are incompatible with the Paris target of 1.5 degrees. Russia has one of the world’s largest fossil fuel reserves. The oil and gas fields that the majors have helped to develop will contribute catastrophic quantities of CO2 for a world so close to its carbon budget. Some Russian fields, including those developed by BP and Total, feature on the ‘carbon bombs’ list of projects that, if exploited, guarantee safe limits will be exceeded.
Oil and gas projects in Russia have virtually no environmental oversight and are wreaking havoc on the local ecosystems and bringing major global impacts. According to IEA data, Russia is the world’s biggest source of methane from fossil fuel extraction. The country’s gas infrastructure, including production facilities and pipelines, is notoriously leaky resulting in methane poisoning of the atmosphere. The scale of environmental damage from extraction in Russia is so huge that it became a subject to investigations with the use of space satellites. Analyzing satellite data for 2019-2020, researchers of private company Kayrros SAS discovered 46 huge methane releases (super-emissions) from Russian oil and gas facilities.
Unlocking of carbon bombs and creation of super emissions of methane are results of the dash for cash and profit off Russian oil and gas. They contribute to global climate disruption and bring us closer to irreversible climate tipping points, which can bring the Earth to losing millions of species of life and mass extinction.
Energy companies are now pivoting to the marketing trick of saying we need fossil fuels until clean energy technologies are more developed in a few years, yet when a new pipeline or refinery is built, it may have a lifespan of 50-60 years, and such investments block reinvestment into future clean and cheaper green energies. Oil majors knew for decades about all the negative consequences of this fossil fuel lock in, yet they persisted in old ways and continued to explore and develop new fields as their primary source of income, contrary to climate science, and regardless of their public statements on human rights and the environment and their sustainability claims. Likewise, they had two decades of opportunities to see who Putin really was, yet continued to invest in and profit from his criminal regime.
They were accompanied by big international banks like JPMorgan Chase, Citigroup, HSBC and Crédit Agricole, who have provided billions dollars of loans for development of Russian oil and gas projects in recent years and continued providing financial services for them after Putin started the massacre with a full scale military invasion.
By maintaining ties with Russian oil and gas, energy companies and banks are prolonging genocidal war in Ukraine and fuelling the climate crisis. Propped by record revenues from fossil fuel trade, the Kremlin has turned our country into a blood bath and is trying to create a humanitarian crisis during winter by attacking Ukraine’s civilian energy infrastructure. The ethical implications of complicity in Putin’s war crimes have brought into question the social license of these institutions. Therefore, continued involvement in production of Russian oil and gas represents significant business, legal, and reputational risk for such entities and their executives.
We call on everyone who stands for peace and justice, and every responsible government, institution, bank, pension fund or organization to sever all ties with energy companies, who are involved in financing Putin's war. We must force them to stop doing profitable business with Russian fossil fuel producers and traders. Without big oil and gas standing behind his back, Putin’s power will shrink to impotence. Without fossil fuel income he would no longer be able to plough billions of dollars into the destruction of Ukraine and international rule-based order.
