As the Ukraine war escalates, President Joe Biden's March 8 executive order that bans imports from Russia of crude oil, certain petroleum products, liquefied natural gas and coal, and also halts new U.S. investments in the country's energy sector—adds a new dimension to already announced moves by American and global energy firms and other corporate giants to leave the country or lighten their footprints.

But the order's provision stating that "Americans will also be prohibited from financing or enabling foreign companies that are making investment to produce energy in Russia" generates new uncertainty about whether U.S. construction sector companies in some energy-linked arenas, including engineers, contractors, equipment firms and technology vendors, may be forced to depart or rescope their work. 

Meanwhile, international construction sector firms with ongoing projects and personnel in the region already are departing the country or are weighing options closely.

In a March 11 note, engineering sector management consultant Morrissey-Goodale predicted that about 50 North American design firms "would choose or be forced to" separate from work in Russia.

AECOM announced on March 8 that the company will exit work in Russia “immediately,” with CEO Troy Rudd saying the country’s actions are “inconsistent with [the firm's] values and have compromised” its business environment and clients.

Fluor Corp. has no operations in Ukraine, but its personnel in Russia “are accounted for,” the contractor said in an email sent to ENR before the Biden order. “We are working alongside our clients and partners in the region to ensure that our contingency plans are successfully implemented.” 

The firm did not identify its clients and partners nor update by press time any impact on its Russia presence from the Biden order. Fluor said it “shares deep concern and empathy for the Ukrainian people and all those who have been affected directly and indirectly,” adding that it is “extremely saddened by the loss of innocent lives and support the strongest possible international response.” 

Montreal-based design firm WSP Global announced on March 10 with quarterly results, that it will exit its "limited number of ongoing assignments for projects in Russia and Belarus," and will not pursue others, noting that it has no employees there and its "economic exposure ... is not material and is expected to be under $1 million." The firm did not specify projects and clients affected.

Canada frozen foods giant McCain Foods Ltd. said also on March 10 it will end construction begun last year of its first manufacturing plant in Russia, an estimated $167-million facility south of Moscow, and will halt sales there. Financial sanctions on Russia have likely made it more difficult to pay suppliers across borders, a professor of agricultural economics at the University of Guelph told the Globe and Mail publication.

Meanwhile, Russia President Vladimir Putin told government officials on March 10 the country would seek "legal solutions" to nationalize assets abanconed by western firms, media reports say.

"Any lawless decision by Russia to seize the assets of these companies will ultimately result in even more economic pain for Russia. It will compound the clear message to the global business community that Russia is not a safe place to invest and do business," said White House spokeswoman Jen Psaki in a late March 10 tweet. "Russia may also invite legal claims from companies whose property is seized. We stand with American companies who are making tough decisions regarding the future of their Russian operations."


'Monitor and Assess'

Also facing potential impact is McDermott International, which last October announced a major petrochemicals complex award in Russia for a unit of RusGazDobycha, a Moscow-based energy firm. The project cost was not disclosed, but the firm said work would be done by personnel in two other European countries, and has won previous project contacts.

"McDermott continues to carefully monitor and assess the regional and global impacts of Russian military actions in the Ukraine, related sanctions, and other actions," said company spokeswoman Reba Reid in an email to ENR on March 9. "We are complying with all sanctions and will continue to evaluate additional action appropriate given our commitments to our people, our projects and our communities."

UK-based engineering firm Wood, which also has a large Houston-based operation with an energy and industrial focus, said it has 250 staff in Russia. "We have established an Emergency Management Team who are actively leading Wood’s response," the firm said in a website update. "Contingency plans are in place and, as a precautionary step, we are beginning to relocate colleagues whose home location is outside of Russia. Our trade compliance team continues to monitor the international sanctions."

The firm also said it "made the decision not to bid any new work in Russia and is reviewing its longer-term position, in line with many of our clients."

Steve Demetriou, Jacobs chair and CEO, said on LinkedIn that while the firm has no operations, offices or real estate in Russia or Belarus, it is evaluating its links with Russian-controlled entities, and will terminate those that are found. "Our immediate concern is for the safety and well being of our colleagues and their families in Ukraine, and other countries, including Poland," he said.

Although Swedish design firm Sweco Group has no subsidiary or employees based in Russia, it maintains a footprint in the country through “ongoing export projects,” said spokesperson Johnny Nylund. The projects are mainly for clients in Sweco’s home markets, he said.

"Sweco is now addressing these projects both from a security perspective and sanctions perspective, with the aim that the projects should be stopped in coordination with the clients,” said Nylund, adding that the firm decided earlier this year to not pursue new export projects in Russia.


Caterpillar Is Out

Equipment giant Caterpillar also has joined the business exodus from Russia, announcing late on March 9 that operations there "have become increasingly challenging, including supply chain disruptions and sanctions.” In a release, it said it is in compliance with laws involving sanctions, while “remaining focused on our employees, dealers, and customers.”

Through its foundation, Caterpillar is donating more than $1 million to support needs caused by the Ukraine crisis, it said.

A list of more than 300 companies that have either recently departed Russia because of Ukraine, or still are working there, which is being compiled by Yale University management school professor Jeffrey Sonnenfeld and a research team, says that Caterpillar had generated 8% of its revenue, or about $4 billion, from Russia.

Technology firm Trimble said that as of early March, it "ceased selling our products and services in Russia and Belarus,” according to a website statement.

Firms working in nearby countries also are taking stock of how, if and when the conflict might affect their ability to continue doing business in the region.

“We do operate in Poland and Romania and are closely monitoring the situation,” said Arcadis spokesperson Katie Lawler. “[We’re] working with local management teams to support any colleagues and their families that may be affected by the unfolding humanitarian crisis.”