Invasion response

Shell follows BP by selling Russian assets

shell
Shell will take a hit from its exit

Shell is exiting its joint ventures with the Russian energy company Gazprom following the invasion of Ukraine.

The decision includes the energy giant’s 27.5% stake in the Sakhalin 2 liquefied natural gas plant, its 50% stake in the Salym Petroleum Development and the Gydan energy venture.

Shell, whose Russian assets were reportedly valued at $3 billion at the end of last year, also said it will stop working on the controversial Nord Stream 2 pipeline project, which was completed last September. 

The oil giant is said to have invested £750 million in the 750-mile pipeline – designed to double the amount of natural gas flowing through the Baltic Sea pipe from Russia to Germany.

The company’s move comes just a day after BP said it would be selling its 19.75% holding in Rosneft and followed talks between Shell chief executive Ben van Beurden and the Business Secretary Kwasi Kwarteng.

In a statement Mr van Beurden said: “We are shocked by the loss of life in Ukraine, which we deplore, resulting from a senseless act of military aggression which threatens European security.

“Our decision to exit is one we take with conviction. We cannot — and we will not — stand by. Our immediate focus is the safety of our people in Ukraine and supporting our people in Russia. 

“In discussion with governments around the world, we will also work through the detailed business implications, including the importance of secure energy supplies to Europe and other markets, in compliance with relevant sanctions.”

The company said that it expects its decision to impact the book value of its Russia assets and lead to impairments.

Mr Kwarteng congratulated Shell on its decision. He said: “Shell have made the right call to divest from Russia – including Sakhalin II. There is now a strong moral imperative on British companies to isolate Russia.”

BP shares fell by up to 7% at the start of trading but closed down 3.95%.

 



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