Shell plc will exit its Gazprom ventures in response to Russia’s invasion of Ukraine. The move comes on the heels of BP’s announcement on February 27 that it will cut ties with another state-owned Russian energy company Rosneft.
Shell has about $3 billion tied up in its projects with Gazprom, which like Rosneft is state owned. These include a 27.5% stake in the Sakhalin-II liquefied natural gas facility, 50% of each of the Salym and Gydan upstream ventures and 10% of the Nord Stream 2 gas pipeline, which the German government halted last week. Of the other four investors in Nord Stream 2, Germany’s Wintershall has also withdrawn, while Austria’s OMV, France’s Engie and Germany’s Uniper have said they are assessing the situation.
“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 CEO Ben van Beurden. “Our decision to exit is one we take with conviction. We cannot – and we will not – stand by.”
Divesting is easier said than done, wrote Dan Primack, an editor Axios. “Announcing plans to divest is very different than actually divesting. Particularly when Russia’s central bank is severely limiting the sale of Russian equities by nonresidents, and the U.S. is blocking that bank from engaging in dollar-denominated transactions,” Primack said in an article.
Norway’s sovereign wealth fund also says it is shedding positions in Russian assets but was unclear about what strategies it was employing, as are automotive company Daimler Truck and refiner Equinor, Primack said.
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