Shell plc (Shell) plans to exit its joint ventures with Gazprom and related entities over Russia’s actions against Ukraine. The withdrawal includes its 27.5% stake in the Sakhalin-II liquefied natural gas facility, its 50% stake in the Salym Petroleum Development, and the Gydan energy venture. Shell also intends to end its involvement in the Nord Stream 2 pipeline project.
“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 Chief Executive Officer, Ben van Beurden.
“Our decision to exit is one we take with conviction,” said 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.”
At the end of 2021, Shell had around US$3 billion in non-current assets in these ventures in Russia, which includes:
Sakhalin-2
Shell has a 27.5% interest in Sakhalin-2, the joint venture with Gazprom, an integrated oil and gas project located on Sakhalin Island. Other ownership interests are Gazprom 50%, Mitsui 12.5%, Mitsubishi 10%.
Salym
Shell has a 50% interest in Salym Petroleum Development N.V., a joint venture with Gazprom Neft that is developing the Salym fields in the Khanty Mansiysk Autonomous District of western Siberia.
Nord Stream 2
Shell is one of five energy companies which have each committed to provide financing and guarantees for up to 10% of the estimated €9.5 billion total cost of the project.
Gydan
A joint venture With Gazprom Neft (Shell interest 50%) to explore and develop blocks in the Gydan peninsula, in north-western Siberia. The project is in the exploration phase, with no production.
