Big international energy companies have signalled their intention to pull out of working in Russia after its invasion of Ukraine.
Big international energy companies have signalled their intention to pull out of working in Russia after its invasion of Ukraine.
Shell has announced its intention to exit its joint ventures with Gazprom and related entities, including 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.
Shell’s staff in Ukraine and other countries has been working together to manage the company’s response to the crisis locally, said the company. Shell will also work with aid partners and humanitarian agencies to help in the relief effort.
‘Our decision to exit is one we take with conviction,’ said Ben van Beurden, Shell CEO. ‘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 $3 billion in non-current assets in these ventures in Russia.
BP will exit its 19.75% shareholding in Rosneft, which it has held since 2013. Additionally, bp chief executive officer Bernard Looney is resigning from the board of Rosneft with immediate effect. The other Rosneft director nominated by bp, former bp group chief executive Bob Dudley, is similarly resigning from the board. The resignations will require bp to change its accounting treatment of its Rosneft shareholding and, as a result, it expects to report a material non-cash charge with its first quarter 2022 results, to be reported in May. The company said it could be charged as much as $25 billion for ending its Russian investments.
‘The decisions we have taken as a board are not only the right thing to do, but are also in the long-term interests of BP,’ said chief executive Bernard Looney.
BP chairman Helge Lund, added: ‘Russia’s attack on Ukraine is an act of aggression which is having tragic consequences across the region. BP has operated in Russia for over 30 years, working with brilliant Russian colleagues. However, this military action represents a fundamental change. It has led the BP board to conclude, after a thorough process, that our involvement with Rosneft, a state-owned enterprise, simply cannot continue.’
Equinor will pull out of its joint ventures in Russia and stop investing in the country. The company, which has been in partnership with Rosneft since 2012, said that it had $1.2 billion of assets in Russia. ‘We regard our position as untenable,’ said Equinor’s president and chief executive Anders Opedal.
Wintershall Dea has decided not to advance or implement any additional gas and oil production projects in Russia and to write off its financing of Nord Stream 2 totalling around 1 billion euros. Wintershall Dea remains active in GASCADE Gastransport. GASCADE operates a 3200 km gas pipeline network in Germany: critical infrastructure for gas transport in Germany and Europe. Wintershall Dea remains involved in the existing Yuzhno Russkoye and Achimov natural gas production projects in Siberia. The projects produce natural gas for European energy supply.
ExxonMobil is planning to cease operations on the Sakhalin-1 project in Russia after the country’s invasion of Ukraine. ExxonMobil has been leading an international consortium of Japanese, Indian and Russian companies. ExxonMobil said it will not invest in new developments in Russia.
TotalEnergies said it would ‘no longer provide capital for new projects in Russia’.
Russian president Vladimir Putin has warned that Russia would seize the assets of international oil companies that no longer wanted to do business in Russia. ‘There are enough legal and market instruments for this,’ he said.
