Following the invasion of Ukraine, British publicly traded multinational oil and gas company, Shell Plc has disclosed that it will exit all its Russian operations, including a major liquefied natural gas plant.
This is also the company’s move in becoming the latest major Western energy company to quit the oil-rich country. Recall that the company’s rival, BP plc., also a British multinational oil and gas company, abandoned its stake in Russian oil giant, Rosneft, a development which could cost the British company over US$25 billion (RM105 billion).
BP Plc., like Shell, is one of the world’s seven oil and gas super majors. It is a vertically integrated company operating in all areas of the oil and gas industry, including exploration and extraction, refining, distribution and marketing, power generation, and trading.
In a statement, Shell Plc. revealed that it 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.
“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”, the company’s chief executive, Ben van Beurden said in the statement.
“Our decision to exit is one we take with conviction. We cannot – and we will not – stand by”, he added, describing Russia’s actions as “a senseless act of military aggression which threatens European security”.
Shell, however, said the Russia exit will not affect its plans to switch to low-carbon and renewable energy. Investors King gathered that Shell is working to provide more renewable and low-carbon energy options for customers through investments in wind, solar, electric vehicle charging, hydrogen, and more.
Reuters reports that the company also plans to end its involvement in the Nord Stream 2 Baltic gas pipeline linking Russia to Germany, which it helped finance as a part of a consortium of companies. Shell will also exit the Salym Petroleum Development, another joint venture with Gazprom.
Investors King gathered that Norwegian oil and gas producer, Equinor also announced its exit from Russia on Monday, as it said it would begin the process of divesting from its joint ventures in the country.
Equinor is an international energy company present in almost 30 countries worldwide, including several of the world’s most important oil and gas provinces. Founded in 1972 under the name Den Norske Stats Oljeselskap AS—Statoil (the Norwegian State Oil company), the company is engaged in exploration, development and production of oil and gas, as well as wind and solar power.