Shell next IOC to announce Russian withdrawal
Shell has followed on the heels of BP and Norway's Equinor in announcing its intention to withdraw from oil and gas projects in Russia in response to Moscow's invasion of Ukraine, the UK major said on February 28.
Shell intends to withdraw from the Gazprom-operated Sakhalin LNG plant in the Russian Far East, where it holds a 27.5% stake, and the Salym Petroleum and Gydan partnerships it has with Gazprom Neft in west Siberia. What is more, it is exiting Nord Stream 2, dealing a significant blow to the long-delayed Russian pipeline project to Germany.
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Shell is one of five European energy companies that provided Gazprom with loans to build Nord Stream 2. The others are Engie, OMV, Uniper and Wintershall Dea. In a potential death knell for the project, German chancellor Olaf Scholz said last week his government would halt the certification process necessary for the pipeline to pump gas. Germany has previously been an ardent supporter of the project.
Shell CEO Ben van Beurden said the company was "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," van Beurden said. "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."
Shell said it had around $3bn in non-current assets in Russia at the end of last year, warning that its decision to exit the country would undermine the book value of its Russian assets and lead to impairments. It generated $0.7bn in adjusted earnings from its Russian business in 2021.