May 24, 2022

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Shell follows BP’s lead out of Russia as British oil companies abandon Putin

Shell follows BP's lead out of Russia as British oil companies abandon Putin

The UK-based oil company said on Monday it was giving up its 27.5% stake in the Sakhalin-2 liquefied natural gas facility, its 50% stake in a project to develop the Salem fields in West Siberia and its 50% stake in a peninsula exploration project. Gedan in Northwest Siberia.

“We are shocked by the loss of life in Ukraine, which we regret as a result of a senseless act of military aggression that threatens European security,” he added. seashells (RDSA) CEO Ben van Beurden said in a statement.
Shell move follows BP’s (BP) On Sunday, it announced that it had given up one of the largest foreign investments for Russia to leave it 19.75% of Rosneft shares and associated joint ventures. Analysts said Monday that BP could incur more than $26 billion as it divests its business in the country.

“Our decision to exit is a decision we make with conviction,” Van Burden said. We cannot – and will not – stand idly by.”

Shell earned about $700 million in 2021 from the Sakhalin and Saleem joint ventures. its interests in Russia Valued at about $3 billion at the end of the year, the company said abandoning Gazprom’s projects would likely result in impairment charges.

The company was one of five companies that provided 50% of financing and guarantees for the estimated cost of 9.5 billion euros ($10.6 billion) to build the Gazprom Nord Stream 2 pipeline under the Baltic Sea between Russia and Germany. The project effectively came to a halt last week when German Chancellor Olaf Schulz said the country would halt certification of the pipeline.

Other Western energy companies continue to maintain a presence in Russia, including ExxonMobil (XOM)which has been active there for more than 25 years.

Its subsidiary, Exxon Neftegas Limited, owns a 30% stake in Sakhalin-1 – a huge oil and natural gas project located off Sakhalin Island in the Russian Far East. It has operated the project since 1995 on behalf of a consortium that includes Japanese and Indian partners, as well as two Rosneft subsidiaries.

See also  Apple, Microsoft and other tech companies halt sales in Russia

– Chris Liakos contributed to this article.