Shell, the global group of energy and petrochemicals companies, has announced that it has severed its partnership with Gazprom. The company has exited its joint ventures with Kremlin-backed Gazprom and related entities, including its 27.5% holding in the Sakhalin-2 liquified natural gas facility, its 50% stake in the Salym Petroleum Development and the Gydan energy venture. Shell also announced that it intends to end its involvement in the Nord Stream 2 pipeline project.
At the end of 2021 Shell had around $3billion in non-current assets in these ventures in Russia. It is expected that this decision to withdraw will impact the book value of Shell’s Russia assets and lead to impairments.
Shell’s Chief Executive Officer Ben van Beurden said that he was “shocked by the loss of life in Ukraine” and that the company “cannot and will not stand by”. “Our decision to exit is one we take with conviction,” said Mr 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.”
Shell has more than 80,000 employees in more than 70 countries and Shell’s staff in Ukraine have been working with their colleagues in other countries to manage the company’s response at a local level. Shell has advised that it will work with aid partners and humanitarian agencies in the relief effort.
The announcement follows yesterday’s decision by BP who has removed itself from a 19.75% shareholding in Russian state owned Rosneft. BP has operated in Russia for over 30 years. Bernard Looney and Bob Dudley, BP’s present and past CEOs have resigned from the Board of Rosneft with immediate effect. The company has pledged to support their colleagues in Ukraine and the wider humanitarian effort.
ContractingWISE has access to a wide range of hassle-free services that can help you with your contracting career. To talk to a member of our team, call: 0203 642 8679
