‘We will not stand by’: Shell exits Russia projects worth $3bn as Ukraine backlash grows

ENERGY giant Shell has bowed to pressure to exit all joint ventures with Kremlin-controlled oil firm Gazprom, ditching stakes in three major gas projects and the undersea pipeline Nord Stream 2 worth a total of $3 billion.

CEO Ben van Beurden said: “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.

“Our decision to exit is one we take with conviction. We cannot – and we will not – stand by.”

The departure of one of the world’s biggest oil and gas groups will deprive Vladimir Putin’s all-important energy industry of both foreign investment and valuable expertise.

It comes a day after rival BP announced it was to sever links with state-controlled Rosneft in a move which sent its shares down by as much as 7.5% despite rising Brent Crude and natural gas prices.

Norway’s biggest energy company Equinor also announced a retreat from Russia, where it holds assets of $1.2 billion, amid a growing corporate backlash.

Shell holds a 27.5% stake in Gazprom’s flagship offshore project Sakhalin-2, which supplies about 4% of the global market for liquefied natural gas.

It is also holds a 10% stake worth $1 billion in Gazprom’s controversial Nord Stream 2, the 750-mile undersea pipeline that had been due to double the flow of natural gas from Russia to Germany before Berlin pulled the plug last week.

Shell’s staff in Ukraine and other countries have been working to manage the company’s response to the crisis on the ground. Shell will also work with aid partners and humanitarian agencies to help in the relief effort.

Van Beurden said: “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.”

Shell expects the move to lead to impairments but said its progressive dividend policy and multi-billion dollar share buybacks will not be affected. Together, Salym and Sakhalin 2 contributed $700 million to Shell’s net earnings in 2021.