Shell is abandoning its operations in Russia and its joint ventures with Gazprom – the Russian multinational energy corporation – including its participation in the Nord Stream 2 natural gas pipeline, which would have the potential to supply 26 million German households.
Shell, the UK-based oil company said on Monday it would drop its stake of 27.5% in the Sakhalin-2 liquefied natural gas facility, its share of 30% in a project to develop the Salym fields in western Siberia and its share of 50% in a project of exploration on the Gydan peninsula in northwestern Siberia.
“We are shocked by the loss of life in Ukraine, which we deplore, as a result of a senseless act of military aggression that threatens the security European Union,” said Shell CEO Ben van Beurden.
Shell earned around $700 million dollars in 2021 from the Sakhalin and Salym joint ventures. Its interests in Russia were valued at about $3,000 million dollars at the end of the year, and the company said it would abandon Gazprom’s projects would probably generate impairment charges.
“Our decision to leave is one we made with conviction. We cannot, and will not, stay on the sidelines,” van Beurden said.
The company was one of five that provided the 50% of the financing and guarantees for the estimated cost of €9,500 million euros (about $10,600 million dollars) from the construction of Gazprom’s Nord Stream 2 pipeline under the Baltic Sea between Russia and Germany.
The project was effectively canceled last week when German Chancellor Olaf Scholz said the country would stop certifying the pipeline.
Some European energy companies continue to have a presence in Russia, including the remaining partners of Nord Stream 2, such as France’s Engie, Austria’s OMV, Germany’s Wintershall Dea and Uniper, as well as the Italian ENI.
ExxonMobil, which has been active there for more than 25 years, has reduced its presence since Russia annexed Crimea in 2014. But its subsidiary, Exxon Neftegas Limited, still has a 30% stake in Sakhalin-1, a major oil and natural gas project located off to Sakhalin Island in the Russian Far East. Has operated the project since 1995 on behalf of a consortium including Japanese and Indian partners.
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