russia oil uk government

UK Government gave £2m to US oil firm exporting to Russia

A US multinational based in Montrose, which was criticised for exporting goods to Russia months after the invasion of Ukraine, received a £2.1m grant from the UK Government last summer.

Baker-Hughes is at the centre of a row after The Ferret revealed it 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. 

The oil services firm received £4.9m of taxpayers’ money from Scottish Enterprise, and following our revelation the Scottish Government threatened to withhold the final instalment of a grant it was due.

We can now report that the UK Government’s Department of Business, Energy and Industrial Strategy (BEIS) awarded Baker-Hughes £2,122,699 on 8 June 2022. The grant was for research and the development of a subsea system for offshore carbon storage. 

Baker-Hughes’ last shipment of equipment from Montrose to Russia was in June 2022. There is no suggestion that it broke the law or any international trade sanctions with those exports.

However, critics expressed concern that taxpayers’ money was given to a company still trading with Russia.

They 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.

It’s not only about feeding the war in Ukraine. Baker-Hughes involvement in a major fossil fuel infrastructure expansion project in Russia should have been banned by the government, not subsidised

Svitlana Romanko, Razom We Stand

Baker-Hughes told The Ferret the BEIS grants had “absolutely nothing to do with Russia” and that it condemns violence and remains “compliant with all applicable sanctions”. The firm suspended new investments in Russia in March 2022 and has followed applicable laws since then.

However, those opposed to taxpayers’ money being awarded to Baker-Hughes include Ross Greer MSP, of the Scottish Greens. He argued that the UK Government should not be providing money or support to “any company or individual aiding the Russian war machine” either directly or indirectly.

“When it was revealed that the Scottish Government had given funding to the same company, immediate action was taken, and the decision was made to withhold further funding from any company doing business with Putin’s Russia,” Greer said. 

“Downing Street must do the same and ensure that no public money is going to those who continued profiting from Russian trade months after Putin launched his brutal invasion.”

Svitlana Romanko, founder and director of Razom We Stand, a human rights organisation based in Ukraine, also voiced concern. She said: “This is beyond comprehension that taxpayers’ money was used to serve the expansion of the Russian gas industry, and support a company whose business model is based on catering to limitless expansion of fossil fuels. 

“Baker-Hughes should be forced to pay back the received grant.”

uk government
“Downing Street must ensure that no public money is going to those who continued profiting from Russian trade months after Putin launched his brutal invasion,” said Ross Greer MSP, of the Scottish Greens.

Baker-Hughes, a major employer in the UK, told The Ferret that the £2.1m “technology grant” from the UK Government last year was for the development of an “innovative electrified subsea system” for offshore carbon storage. 

“Similar research grants were awarded to numerous other organisations as part of the same funding competition,”  a spokesperson for the firm added.

“Neither the grant nor the last shipment out of Montrose in June 2022 had anything to do with the Arctic LNG-2 project (a project in Arctic-Russia that Baker-Hughes pulled out of last July), and to suggest otherwise would be wholly incorrect.”

The spokesperson for Baker-Hughes also expressed “grave concern” about the war in Ukraine and said the firm has “communicated and aligned closely with Scottish Enterprise on this issue”.

The US firm employs 4000 staff in the UK and has a subsea “centre of excellence” in Montrose which serves “global oil and gas activities”. 

In January, the US firm reported that for the last quarter in 2022 its oilfield services and equipment sales were up 12 per cent on the previous year, to around £2bn.

A UK Government spokesperson said: “We welcome the growing number of organisations and governments joining the whole international community in isolating Russia, both diplomatically and financially.

“The UK and our allies have introduced some of the broadest and most severe sanctions against Russia that any country has faced. Putin’s unprovoked invasion of Ukraine must be a wake-up call for British businesses with commercial interests in Russia.”

Cover image thanks to Andrii Zorii/iStock

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