Shell in Talks to Sell Torzhok Plant


Shell in Talks to Sell Torzhok Plant
A worker monitors a packaging line in Shell’s lubricant factory in Torzhok, Russia. Photo courtesy of Shell

Shell is negotiating with an unidentified party to sell its lubricant blending plant in Torzhok, Russia, along with its network of fuel stations in the country, an official said last week.

The talks are in line with the energy giant’s previous statements that it would exit all activities in Russia in reaction to the country’s invasion of Ukraine.

The statement by Sergey Starodubtsev – chief of Shell’s subsidiary in Russia – did not say with whom the company is negotiating or suggest a timeline for reaching an agreement. Industry analysts speculated that the potential buyer is Russian or based in a country that has not taken a hard stance against the invasion.

Starodubtsev said Shell will suspend operations at the blending plant and fuel stations in coming days to facilitate the sale.

Shell is among the biggest foreign lubricant suppliers in Russia. The Torzhok plant has capacity to manufacture 180,000 metric tons of finished lubes annually, but the company undertook an expansion in October designed to increase capacity to 270,000 t/y. It is not clear whether that project, scheduled to finish next year, is still ongoing.

Based in London, Shell had one of the swiftest and most dramatic reactions to Russia’s invasion among international oil companies. Days after the Feb. 24 start of the war, Shell said it would exit its oil and gas joint ventures in Russia, and a week later it vowed to halt all activities in the country. The company subsequently added, though, that the process of exiting could be complicated and take time.

Some international companies have said that efforts to exit Russia businesses were further complicated by government warnings that it could prosecute individuals taking such actions in support of foreign sanctions against the country.

Starodubtsev said Shell’s priority is to maintain the safety of its employees and production processes, to preserve jobs and to comply with Russian legislation.