Plexus to suspend activities with Russian licensee

Scotland’s oil and gas services firm Plexus Holdings has decided to suspend activities with its Russian licensee Gusar until further notice as a result of the ongoing situation in Ukraine.

Plexus has a license agreement with Gusar under which the Russian company is able to supply the Russian and CIS markets with Plexus’ POG-GRIP rental exploration wellhead equipment used from jack-up rigs.

The suspension of activities is anticipated to not have a material impact on Plexus’ financial trading performance in the year ending 30 June 2022 (FY22), which the Board expects will remain in line with market expectations.

However, Plexus believes it will incur Gusar related negative cash flow impact of circa £650,000 in FY22 related to a combination of pending royalties and planned advance stage payments for wellhead equipment which, as a result of the situation, are currently uncertain.

Next steps include following the impact of the crisis on Russian commercial activities, with further updates set to be announced as required.

As the company had been performing well, it is currently anticipated that despite this situation, the year-end cash position will be broadly in line with expectations.

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Plexus revealed it is actively pursuing opportunities in its main target markets outside of Russia, in particular the UK and European Continental Shelves. These include production wellhead sales, a number of product developments using proprietary POS-GRIP technology, and the newly re-entered exploration rental wellhead market activities.

The Aberdeen-headquartered firm is just one of many companies that have ditched their operations in Russia following its attack on Ukraine. Energy majors BP, EquinorShell, and ExxonMobil announced their intentions to abandon their Russia-related businesses, while the French major TotalEnergies said it would no longer provide investments for new Russian projects.

German oil and gas company Wintershall Dea decided not to pursue any additional gas and oil production projects in Russia, to stop all planning for new projects, to basically stop payments to Russia with immediate effect, as well as to write off its financing of Nord Stream 2.

Most recently, Austria’s OMV followed the same footsteps by announcing it is reevaluating its engagement in the country following the attack on Ukraine, and as a result, Russia will no longer be its core region.

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