Shell Becomes Latest Big Oil Company To Distance Itself From Russia

Thomas Catenacci(DCNF)

Big Oil corporation Shell announced Monday that it would leave its partnership and ventures with Russian state-controlled energy giant Gazprom.

Shell will divest from its 27.5% stake in the Sakhalin-II liquefied natural gas facility, its 50% stake in the Salym Petroleum Development and its 50% stake in the Gydan energy exploration venture, the corporation announced Monday. The London-based fossil fuel company said it would pull out of its Russian ventures in light of the country’s military invasion and aggression in Ukraine.

“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,” Shell CEO Ben van Beurden said in a statement. “Our decision to exit is one we take with conviction.”

“We cannot – and we will not – stand by,” van Beurden added. “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 will also exit from the $11 billion Nord Stream 2 project, a direct Russia-to-Germany natural gas pipeline completed in September, 10% of which the company financed, the company said Monday. German Chancellor Olaf Scholz ordered his government to halt certification of the pipeline Tuesday after Russian President Vladimir Putin ordered troops into Ukraine.

Overall, Shell had about $3 billion invested in Russian ventures at the end of 2021.

Meanwhile, BP announced over the weekend that it would exit its nearly 20% stake in Russian state-run firm Rosneft after facing pressure from the British government.

“Welcome news that BP is joining the rapidly growing list of organisations and governments isolating Russia over Putin’s brutal and miscalculated invasion of Ukraine,” British Prime Minister Boris Johnson tweeted Sunday.

Big Oil’s divestment from Russian ventures, however, could open the door for Chinese companies to purchase the outstanding stake, The Wall Street Journal reported.

ExxonMobil, another Big Oil firm, has yet to address whether it would retain its stake in its Russian ventures. The Houston-based corporation owns a 30% stake in the Sakhalin-1 offshore oil drilling project, according to Barron’s.

ExxonMobil didn’t immediately respond to a request for comment from the Daily Caller News Foundation.