Shell and bp exit Russia following Ukraine invasion

Oil giants Shell and bp have announced their disinvestment in Russia following the country’s invasion of neighbouring Ukraine.

In a statement, bp revealed its intention to sell its 19.75 per cent stake in Russian state-owned oil company Rosneft, a move that could cost AUD$35 billion.

While Shell stated its intention to end all partnerships with Russian state-owned company Gazprom, including its 27.5 per cent stake in the Sakhalin-II liquefied natural gas facility, its 50 percent stake in the Salym Petroleum Development, and to end involvement in the Nord Stream 2 pipeline project.

Ben van Beurden, CEO of Shell, said the decision to exit is one that it takes with conviction.

“We cannot – and we will not – stand by. 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.”

At the end of 2021, Shell had roughly AUD$4 billion in non-current assets in Russia and expects that the decision to exit will impact the book value of Shell’s Russia asserts and lead to impairments.

Bernard Looney, CEO of bp, will be resigning from the board of Rosneft immediately, along with former bp Group Chief Executive Bob Dudley, positions they have held since 2020 and 2013 respectively.

“Like so many, I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected. It has caused us to fundamentally rethink bp’s position with Rosneft. I am convinced that the decisions we have taken as a board are not only the right thing to do, but are also in the long-term interests of bp,” said Looney.

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