US company sends oil, gas drilling equipment to Russia from Scotland

A US oil multinational which received Scottish Government funding exported oil and gas drilling equipment from Montrose to Russia three months after ministers called on businesses in Scotland to cease trading with the country. 

Baker Hughes – which has received £4.9 million of taxpayers’ money in grants from  Scottish Enterprise – is one of the world’s largest oil field services firms. It has 4,000 staff in the UK, including at sites in Montrose and Aberdeen, The Herald reports.

Documents seen by independent investigative journalism co-operative The Ferret reveal that £21m of import registrations from Baker Hughes Energy Technology UK were filed with the Russian customs service on September 11, 2022.

There is no suggestion that the business broke the law or any international trade sanctions, but the transaction still went ahead in spite of the Scottish Government’s appeal. 

All the exports from Scotland to Russia appear to involve equipment for the oil and gas industry, with 17 of the declarations explicitly mentioning this. The place of origin for the exports was stated as Montrose, where Baker Hughes has two premises. 

The buyer of the exports was a contractor on the Arctic LNG 2 (liquefied natural gas) project in the western Siberia region of Russia, which is led by a Russian gas producer called Novatek.

Arctic LNG 2 aims to transport and sell LNG to international markets. Before Russia attacked Ukraine, Arctic LNG 2 was set to be launched this year and reach full production capacity of almost 20 million tonnes of LNG annually from 2026. 

Critics claim that equipment supplied by Western companies to Russia’s oil and gas sector has helped to support its economy and war efforts in Ukraine in the face of international sanctions.The Scottish Greens said it would now ask the Scottish Government to review its business grants to firms to ensure they are not “profiting from the actions of human rights abusing dictatorships”.  

Baker Hughes said it suspended new investments in Russia in March 2022 and has followed applicable laws. 

The Scottish Government called on businesses to stop trading with Russia on March 3, 2022, when it said: “We have all been inspired by the spirit and bravery of the people of Ukraine, led by President Zelenskyy in their fight for freedom. Let’s do all that we can to support them and weaken the Putin regime’s war effort.” 

The statement added the “Scottish Government and its economic agencies will use all available powers not to support trade and investment activity with Russia”. 

Baker Hughes told The Ferret that its last shipment from Montrose to Russia was in June 2022. One of the largest employers in Angus, the company has two sites in Montrose including a subsea “centre of excellence” which was supported by a £4.9m Scottish Enterprise grant and led to 160 new jobs. 

Last August, Baker Hughes announced it had signed an agreement to sell its oilfield services business in Russia to its local management team. This followed a statement last March that it would suspend new investments in Russia. However, Razom We Stand – an organisation based in Ukraine calling for an embargo on Russian fossil fuels and an end to investment into the country’s oil and gas companies – expressed concern over Baker Hughes’ exports to Russia last summer.

Svitlana Romanko, director of Razom, told The Ferret: “Everyday in Ukraine we bury our brave, innocent people, whose lives have been taken by Russia’s war machine, which is funded and fuelled by fossil fuels.  

“Despite global and Ukrainian calls to cut ties with Russia immediately after the start of the invasion, they have chosen to continue collaboration with the aggressor.” 

Romanko said the Scottish Government “should not turn a blind eye to such reprehensible business behaviour”, arguing its role is to make sure that “businesses in its jurisdiction are not contributing to Russia’s ability to threaten the entire world, and to continue the onslaught in Ukraine”. 

“As a mother, I am horrified by the violence, death and destruction that the Russian war and its enablers brought to our peaceful nation,” Romanko added. “Learning that a firm based in Scotland has been actively contributing to the development of Russia’s bloody oil and gas business drives me to demand justice. I call on officials responsible for export controls in Scotland to immediately open investigations.” 

Ross Greer MSP of the Scottish Greens said he would be asking the Scottish Government for an “immediate review of all grants issued by Scottish Enterprise” to ensure public money is not being used to support companies “profiting from the actions of human rights abusing dictatorships”. 

“No company with even a shred of concern for human rights should be supporting Putin or fuelling his war machine,” Greer added. “Given Russia’s horrific human rights record and their use of oil and gas as a geopolitical weapon over decades, firms should never have been trading there. For any company to have done so in the months after last year’s invasion would frankly be morally bankrupt. Much of Putin’s international power has been built on the gas industry. It is one of many reasons why we need to transition away from fossil fuels and ensure that we are not dependent on regimes like those of Russia and Saudi Arabia.” 

A spokesperson for Baker Hughes said: “Baker Hughes follows applicable laws including trade sanctions. We suspended new investments in Russia operations in March 2022. Our last shipment out of Montrose was in June 2022, and we halted all work supported by Scottish operations in July 2022. We communicated with Scottish Enterprise’s Sanction Team who confirmed they were comfortable with Baker Hughes’ position.” 

A Scottish Enterprise spokesman said: “Scottish Enterprise moved swiftly to support the Scottish Government’s request for companies to take action to cease trade and investment activity with Russia. We have no role in sanctioning or approving exports by any company.” 

The data for Baker Hughes’ exports was obtained by an investigative consultancy called Data Desk and Business4Ukraine, a coalition of organisations that condemn the Russian military invasion. 

Novatek was asked to comment.