US oil and gas corporations, including Halliburton (NYSE:HAL), are under scrutiny following revelations of continued trade with Russia, despite their declared cessation of operations in the country. This development comes to light after the discovery of customs records indicating the importation of over $7.1 million worth of Halliburton-manufactured equipment into Russia since the company's exit announcement.
Halliburton, a leading supplier of oil and gas exploration services globally, sold its Russian business to local management in September 2016. The sale was prompted by pressure on US corporations to halt trading following Russia's invasion of Ukraine. However, Russian customs records reveal that Halliburton subsidiaries exported equipment worth $5,729,600 to their former Russian operation in the six weeks following the sale.
The equipment originated from various countries, including the United Kingdom, Belgium, and France, but was primarily shipped from the United States and Singapore. The last recorded shipment from a Halliburton company was a sealing element costing $2,939.40 on October 24, 2022, from Malaysia to Sakhalin Energy, a consortium developing the Sakhalin-2 oil and gas project in eastern Russia.
Following a brief hiatus, imports of Halliburton machinery into Russia resumed in December 2022 from two entities unaffiliated with the US multinational corporation. The equipment came from Turkey, raising the total value of Halliburton equipment shipped to Russia post-operation shutdown to at least $7,163,317.
The former Halliburton unit now known as BurService received 98% of all exports to Russia made since September last year. Its clients include Gazprom (MCX:GAZP), Rosneft, TNK-BP, and Lukoil. According to customs records, exports of Halliburton equipment to Russia continued until at least June this year.
In response to these revelations, Bob Menendez, the leader of the US Senate foreign relations committee, wrote to Halliburton and its counterparts SLB and Baker Hughes earlier this month. The letter was written following reports that these companies continued to trade with Russia after the Ukraine invasion in February last year.
Halliburton has maintained that it fully complied with sanctions and ceased all operations in Russia over a year ago. The company reported a gross profit of $4.052 billion in the 12 months ending on June 30, 2023, marking a year-on-year growth of 63.19%, despite a $300 million loss on the sale of its Russian unit.
The revelations underscore the challenges multinational corporations face in tracing their trading connections and controlling their goods' distribution through intermediaries. Glib Kanevskyi, CEO of the think tank StateWatch, stated that western governments need to do more to encourage major corporations like Halliburton to regulate the distribution of items that could benefit the Russian economy. He added that transparency should be promoted among these companies regarding their product distribution processes.
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