Oil giant Shell will sell all its Russian operations, including all joint ventures with Gazprom, the company said on February 28, a day after BP abandoned its stake in Russian oil giant Rosneft following Moscow’s invasion of Ukraine.
Shell will quit the Sakhalin 2 liquefied natural gas (LNG) plant in which it holds a 27.5 percent stake, and which is 50 percent owned and operated by Gazprom, Shell said in a statement.
Sakhalin 2, located in waters near Sakhalin Island off Russia’s eastern coast, produces around 11.5 million tons of LNG per year, which is exported to major markets such as China and Japan.
Shell will also exit the Salym Petroleum Development, another joint venture with Gazprom, and intends to end its involvement in the Nord Stream 2 pipeline project.
“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’s chief executive, Ben van Beurden, said in a statement.
The decision comes after rival BP abandoned its 19.75 percent stake in Russian oil giant Rosneft in a move that could cost the British company over $25 billion. BP has held the stake since 2013.
BP, Russia’s biggest foreign investor, abruptly announced the move on February 27, cutting the British firm’s oil and gas reserves in half and production by a third.
“Like so many, I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected,” BP CEO Bernard Looney said in a statement. “It has caused us to fundamentally rethink [BP’s] position with Rosneft.”
(Based on reporting by AP and Reuters)