Shell to exit Russia after Ukraine invasion, joining BP
On Monday, the oil-rich Shell has announced to exist all of their Russia operations, that includes one of their major liquified gas stations and has stepped forward in becoming the recent and latest kind of energy company. Shell has made up their mind and plans to exit from all the joint ventures that they have made with Russia.
The London-based Shell passed a statement on Monday about their exit of a total 27.5% stake in a well-known liquified natural gas station located in Sakhalin Island, Russia, the second stake of 50% stake with the Salym Petroleum Development, known as a group of oil-rich fields found in the West Siberia and the third one is again a 50% stake with an energy venture fund in the Gydan Peninsula.
The CEO of Shell Ben van Beurdan has said a statement this Monday, “Our decision to exit is one we take with conviction”. The CEO of Shell has also added further stating that the company will work through all the details coming in the business implications along with their growing list of sanctions against the country, Russia. The company’s assets in the ventures were around $3 billion at the end of the last year and the decision to abandon them could lead them to different kinds of accounting losses and impairments.
Shell has affirmed that their exit from Russia is not going to affect their plans when they have decided to switch over to renewable energies along with low-carbon. For the company Shell, the largest LNG trader has left the particular project deals a blow in its existing plan to supply gas to all the fast-growing markets in the coming years. Just like the CEO of Shell, Kwarteng has given a small message to the country stating that, “Shell has made the right decision to divest from the operations of Russia.” on the social platform of Twitter.
The company did not straight away respond to the request made by Forbes and did not give any timeline for their divestiture or also any other sign of existing its stakes, but they have still mentioned how it would have its ending in the involvement with the Nord Stream 2, known by as an undersea project worth $11 billion connecting the country of Russia to Germany.
Shell will exit another known joint venture with the company, Gazprom. Together the name of Salym Development and the Sakhalin has contributed nearly $700 million to the net earnings of Shell in the year 2021.
Many people from different filed have given their statement about Shell’s decision and even supported them about existing from all the Russian ventures, including their investors. Large parts and areas of the Russian economy have been called the no-go-zone for the number of Western banks and financial sectors.
The rival BP’s Chief Executive Bernard Looney called a sudden and urgent meeting with their leaders and their teams on Thursday, which was just a few hours after the first bomb that was fell on the Ukraine capital Kyiv from Russia last week.
According to the Chief Executive of the company Shell, it is very shocking with the loss of endless lives of the Ukrainian people which is just happening because of a senseless act of Russia’s military aggression that has been threatening European security.
The Japanese number of trading houses like the Mitsui & Co and the Mitsubishi Corp which has been there with their stakes of 12.5% and 10% investing in the Sakhalin 2, has said separately that they are examining the decision and Shell’s declaration. They have made up their mind to consider the ongoing situation with the government of Japan with their partners involved in the projects. Like the decision made by Shell, other Western companies and banks have made their plan to exit their ventures from Russia.
Russia has been facing economic fallout since the time, Russian President Vladimir Putin has ordered an invasion of Ukraine which happened on the early Thursday and it brought great problems and loss of life. The invasion has intensified the growing list of sanctions which is targeting the Russian government, their businesses and their all sectors of their economy.
One of the most recent was the announcement made by the Treasury, with their last batch of sanctions on Monday only, further blocking any American citizen from doing any other kind of business with Russia’s Central bank, their finance ministry or with the National Wealth Fund.
Shell and BP are not the only ones that are existing from the operations with Russia and their firms. The wealth fund of Norway has acclaimed on Sunday for divesting their Russian assets worth the value of $2.8 billion along with HSBC, a British bank that has informed their staffers that they would stop working with some of the Russian banks. Most of the Russian stocks and funds have crashed on Monday bringing the economy to complete downfall.
It’s coming from Russia that they have become the part of the world to be called, the one country increasingly uninvestable for most of the global investors because of the number of measures that are targeting the central bank’s reserve asset.
One of the biggest foreign investors of Russia, BP has declared on the weekend about their abandoning of its 20% stake in Rosneft, the state-controlled. The moves taken by other Western companies have given a spotlight to other companies with their particular stakes in the Russian gas and oil ventures. Even the one considered to be so neutral, Switzerland has said about adopting the European Union permissions and cutting off the assets of some of their Russian Western companies and individuals.
“We cannot and we will not stand by”, said Ben van Beurden has thought of securing their energy supplies to Europe. It has been very careful in bringing out a strategic relationship with the company, Gazprom by providing all the financing and providing the guarantee for the most controversial Nord Stream 2 pipeline.
The oil giants in Russia, BP and Shell’s investment has completely become an embarrassment and the major targets for politicians because there are growing to be more anger over President Vladimir against Putin’s attack of Ukraine.
The decision made by Shell is not at all pressurizing the other giant companies like the French giant and the TotalEnergies giant. All of the Western oil companies dealing with Russia have now been considered at some risk because of the ongoing atrocities in the country and people. The Russians have caused great problems to the lives of so many people just at the stake of their politics.
It’s just been giving away their lives with no regret. The international economy of Russia is going to face a hard time because so many Western companies just taking away their stakes from the country and do not believe in this insensible war.
One of the BP insiders believed that there is only one way of deciding on their company and themselves and that is just to exit from the operations of Russia. The rival BP as Bernard Looney known to be the Chief Executive even made it very clear with his team members that their company’s investment In Rosneft has become completely untenable and no point can make them change their decision. With the invasion of Ukraine, there is a list of companies that are planning of pulling out their investments which is not a good sign for the Russian government.
This whole invasion of Ukraine is forcing many companies for cutting out their ties, for some companies the reason to exit Russia is because of the conclusion of the decades of the lucrative. Sometimes the fraught or the investments. Russia’s all foreign energies major investing companies have been pouring their money since the time of 1990s, one of the largest investors mentioned above, BP has already led their way in making its final declaration.
Other companies have planned on taking the same decision of pulling out their stakes and feels the same thing about the loss of Ukraine. Its just the Russia should stop their ways in making Ukraine suffer so much, otherwise it won’t be much shocking to people in future when the country’s economy comes to end.
edited and proofread by nikita sharma