olusola Bello
The Board of Shell plc (“Shell”) on Monday announced its intention to exit its joint ventures with Gazprom and related entities, including its 27.5 percent stake in the Sakhalin-II liquefied natural gas facility, its 50 percent stake in the Salym Petroleum Development and the Gydan energy venture. Shell also intends to end its involvement in the Nord Stream 2 pipeline project.
“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,” said Shell’s chief executive officer, Ben van Beurden.
Shell’s staff in Ukraine and other countries has been working together to manage the company’s response to the crisis locally. Shell will also work with aid partners and humanitarian agencies to help in the relief effort.
“Our decision to exit is one we take with conviction,” said van Beurden. “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 around $3 billion in non-current assets in these ventures in Russia. We expect that the decision to start the process of exiting joint ventures with Gazprom and related entities will impact the book value of Shell’s Russia assets and lead to impairments.
Shell’s Powering Progress strategy and financial framework remain unchanged. We reiterate our progressive dividend policy and intent to distribute 20-30 percent of CFFO to shareholders in the form of dividends and share buybacks while targeting a strong balance sheet with long-term AA credit metrics. We stepped up our distributions by announcing an $8.5 billion share buyback programme for the first half of 2022, and we expect to increase our dividend per share by 4 percent for the first quarter of 2022.
Similarly,BP is to offload its 19.75% stake in Russian state-owned oil firm Rosneft after Russia’s “act of aggression in Ukraine”.
The oil giant had come under pressure from the UK government to make the move since Thursday’s invasion.
It has held the shareholding in the Russian company since 2013.
BP chief executive Bernard Looney has resigned “with immediate effect” from the Rosneft board, as has fellow BP-nominated director Bob Dudley.
Rosneft said thirty years of successful cooperation had been ruined and blamed BP’s decision on “unprecedented political pressure”, according to reports from Russian news agencies.
Mr Looney had been on the Rosneft board since 2020, alongside its chairman Igor Sechin, who is a close friend and ally of Russian President Vladimir Putin.
The PA News agency reported Mr Looney was in Russia as recently as October, when he appeared on a panel with Mr Putin, which he later described as a “privilege”.
Business Secretary Kwasi Kwarteng spoke to the BP boss on Friday and left him in “no doubt about the seriousness of government concerns about BP’s overexposure to Russian interests” according to an official.
BP chairman Helge Lund said that, while BP had operated in Russia for more than 30 years and had “brilliant Russian colleagues”, Russia’s attack on Ukraine was “having tragic consequences across the region” and represented a fundamental change.
“It has led the BP board to conclude, after a thorough process, that our involvement with Rosneft, a state-owned enterprise, simply cannot continue.”BBC