Shell Plc said on Feb. 28 it will exit all its Russian operations, including a JV at a major LNG plant and the contentious Nord Stream 2 pipeline, following Russia’s invasion of Ukraine.
“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,” Shell CEO Ben van Beurden said in a statement.
The decision comes a day after rival BP abandoned its stake in Russian oil giant Rosneft in a move that could cost over $25 billion. Norway’s Equinor also announced on Feb. 27 it start the process of divesting from its joint ventures in Russia.
Shell will quit the flagship Sakhalin 2 LNG plant in which it holds a 27.5% stake, and which is 50% owned and operated by Russian gas giant Gazprom. The company also plans to end its involvement in the Nord Stream 2 pipeline from Russia to Germany, which it helped finance as a part of a consortium of companies.
Shell said the decision to quit the joint ventures in Russia will lead to impairments. Shell had around $3 billion in non-current assets in these ventures in Russia at the end of 2021, it said.
“Our decision to exit is one we take with conviction,” van Beurden added. “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.”
Shell’s staff in Ukraine and other countries has been working together to manage the company’s response to the crisis locally. Shell will also work with aid partners and humanitarian agencies to help in the relief effort, according to its release.