View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. News
March 1, 2022updated 23 Mar 2022 12:00pm

Shell to exit JVs with Gazprom in response to Russia’s attack on Ukraine

The energy giant also plans to exit from the Nord Stream 2 pipeline project, which can carry 55bcm of gas.

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict


Shell is planning to exit its joint ventures with Russian state energy firm Gazprom and related entities, following Russia’s invasion of Ukraine.

Shell currently holds a 27.5% stake in the Sakhalin-II liquefied natural gas facility and a 50% interest in the Salym Petroleum Development and the Gydan energy joint ventures (JVs).

Furthermore, Shell plans to exit from the $11.2bn Nord Stream 2 pipeline, which runs between Russia and Germany.

The pipeline, which has been recently put on hold by Germany, has the capacity to carry 55bcm of gas.

Shell CEO Ben van Beurden said: “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.”

In the Russian ventures, Shell had non-current assets worth around $3bn at the end of 2021.

The firm said that the exit would impact the book value of its Russia assets and result in impairments.

The Salym Petroleum Development JV between Shell and Gazprom Neft is developing the Salym fields in the Khanty Mansiysk Autonomous District of western Siberia.

For the Sakhalin-2integrated oil and gas project, Shell is partnered with Gazprom (50%), Mitsui (12.5%), Mitsubishi (10%).

A JV between Shell and Gazprom Neft, Gydan focuses on exploring and developing blocks in the Gydan peninsula in northwestern Siberia.

With the latest move, Shell joins major European oil and gas producers, including Equinor and BP, in exiting from Russia, in response to military action against Ukraine.

Related Companies

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Offshore Technology