Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict
China’s state-run energy companies are in joint discussions to acquire Shell’s stake in a gas export project in Russia, reported Bloomberg News, citing people with knowledge of the matter.
The Chinese firms, including China National Offshore Oil Corporation (CNOOC), China National Petroleum Corp. (CNPC), and Sinopec Group, are considering acquiring Shell’s 27.5% stake in the Sakhalin-2 liquefied natural gas (LNG) venture.
The move comes after Shell’s decision to exit Russian operations in the wake of Moscow’s invasion of Ukraine.
There is no certainty that a sale deal would be signed by Shell with the Chinese firms as deliberations between them are at an early stage.
One of the sources said that Shell would also hold talks with other potential buyers outside of China.
Earlier this month, Shell announced its plan to withdraw from Russia that would result in as much as $5bn of impairments.
Following this, Shell removed dozens of employees on temporary assignment at the Sakhalin-2 project, controlled by Russian gas giant Gazprom, over the weekend. These employees are planned to be relocated back to Shell’s other offices.
Shell owns a stake of 27.5% in the Sakhalin-2 integrated oil and gas project. Other partners include Gazprom (50%), Mitsui (12.5%), and Mitsubishi (10%).
Amid the Russia-Ukraine conflict, BP also plans to offload its 20% stake in Russia’s Rosneft PJSC.
As part of this plan, the firm reached out to state-owned firms in Asia and the Middle East, including CNPC and Sinopec.