Russia-Ukraine Invasion Impact Shell to Quit Joint Ventures with Russia’s Gazprom and Related Entities
Post BP’s announcement to exit its 20 % shareholding in Russia’s Rosneft, Shell has decided to quit all its joint ventures with Russian majority state-owned multinational energy company Gazprom and related entities.
London/UK – The Board of Shell has recently announced its intention to exit its joint ventures with Gazprom and related entities, including its 27.5 percent stake in the Sakhalin-II liquefied natural gas facility, its 50 percent stake in the Salym Petroleum Development and the Gydan energy venture. Shell also intends to end its involvement in the Nord Stream 2 pipeline project.
“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,” said Shell’s chief executive officer, Ben van Beurden.
Shell’s staff in Ukraine and other countries has been working together to manage the company’s response to the crisis locally. Shell will also work with aid partners and humanitarian agencies to help in the relief effort.
“Our decision to exit is one we take with conviction,” said van Beurden. “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.”
At the end of 2021, Shell had around 3 billion dollars in non-current assets in these ventures in Russia. Shell expects that the decision to start the process of exiting joint ventures with Gazprom and related entities will impact the book value of the company’s Russia assets and lead to impairments.
Shell’s Powering Progress strategy and financial framework remain unchanged.