Shell exits joint ventures with Russia’s Gazprom

Shell plc has announced its intention to exit its joint ventures with Russia’s Gazprom and related entities, including its 27.5% stake in the Sakhalin-II liquefied natural gas facility, its 50% stake in the Salym Petroleum Development and 50% stake in the Gydan energy venture.

Shell also intends to end its involvement in the Nord Stream 2 pipeline project.

At the end of 2021, Shell said it 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,” said the company.

Shell 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.

“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 added: “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.”

 

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