With continued Russian aggression towards Ukraine, energy giant Shell cuts ties with it’s current projects on Russian soil.
As the Russia-Ukraine war continues, Shell said it’s dissolving its “equity agreement” with Gazprom, a Russian state-owned energy corporation.
Shell is selling a 27.5 percent share in Sakhalin-II, a Russian integrated oil and gas project, as well as a 50% ownership in Salym Petroleum Development N.V., a joint venture with Gazprom Neft seeking to develop the Salym fields in the Khanty Mansiysk Autonomous District in western Siberia. The business has announced that it is withdrawing from the Nord Stream 2 pipeline project.
Shell CEO Ben van Beurden stated in a statement, “We are appalled by the loss of life in Ukraine, which we regret, as a result of a misguided act of armed action that undermines European security.”
“Our immediate priority is to ensure the safety of our people in Ukraine and to provide support to our colleagues in Russia,” van Beurden said. “We will also work through the particular commercial ramifications, including the significance of safe energy supplies to Europe and other markets, in conformity with appropriate sanctions, in discussions with governments across the world.”
Shell’s move comes only one day after BP said it was selling its 19.75 percent investment in Rosneft, a Russian-controlled oil business. Meanwhile, following Russia’s invasion of Ukraine, the US, along with other countries, has increased sanctions against it.
At the end of 2021, the business stated it had around $3 billion in “non-current assets” through its Gazprom ventures, and that abandoning these investments would affect the value of Shell’s Russia assets.
With Russia becoming increasingly alienated economically from the rest of the world, and with the skyrocketing cost of the war with Ukraine, it will be interesting to see whether the Russian economy and monetary system will be able to hold up.
There are already reports of long lines of Russians desperately trying to withdraw their money from the banking system…
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