Energy Capital & Power

Shell Announces Gazprom Joint Venture Exit

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UK multinational energy firm Shell has announced that it will exit its joint ventures and equity partnerships with Russian oil and gas company Gazprom and associated entities. Shell joins a number of other multinational company who are cutting ties with the country, which is attributed to the ongoing conflict between Russia and Ukraine.

The stakes include the company’s 27.5% share in the Sakhalin-11 liquefied natural gas facility; a 50% stake in the Salym Petroleum Development and Shell’s stake in the Gydan Energy partnership. In Q4, 2021, Shell held approximately $3 billion in non-current assets in these ventures.

According to Ben van Beurden, CEO of Shell, “Our decision to exit is one we take with conviction. 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.”

The UK energy giant will also not be providing $1.065 billion in funding the firm had committed for the development of the Nord Stream 2 pipeline – which will link Russian gas with German markets. The pipeline has been paused following a decree by the German Chancellor, Olaf Scholz, as part of the sanctions that western countries are imposing on Russia.

Shell is now among the growing lists of European and international majors that are exiting oil and gas operations within Russia. Norway’s state-owned energy firm Equinor, for example, also announced that it “will now stop new investments into our Russian business, and we will start the process of exiting our joint ventures in a manner that is consistent with our values.”

Equinor has $1.2 billion worth of non-current assets in Russia and has partnerships with Russian state firm Gazprom. Additionally, British multinational bp has also announced its exit of a 19.75% stake in Russian energy firm Rosneft.

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Nicholas Nhede

Nicholas Nhede

Nicholas is an energy sector journalist with a passion on how technology and diversification of the energy mix can be used to address energy sector challenges. Nicholas holds a diploma in Journalism and Communication studies and has been covering energy-related topics including the Internet of Things, distributed energy and digitalisation since 2015.