Shell PLC (LSE:SHEL, NYSE:SHEL, EURONEXT:SHELL) has become the latest oil company to sever ties with Russia following the country’s invasion of Ukraine, in a move affecting US$3bn worth of assets.
The oil giant will drop its 27.5% stake in the flagship Sakhalin II natural gas facility, which is 50% owned and operated by Gazprom, as well as its 50% stakes in the Salym and Gydan fields.
The group, which is also ending its involvement in the NordStream 2 pipeline project, said it expected the decision to impact the book value of its Russia assets and likely lead to impairments.
Shell CEO Ben van Beurden said the group was “shocked by the loss of life” in Ukraine which it said “threatens European security”.
“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.”
Shell said the move would not impact its dividend policy or share buyback policy which it intends to distribute to shareholders.
The move follows BP PLC (LSE:BP.)’s announcement last weekend that it would sell its 19.75% stake in Russian-owned firm Rosneft (AIM:ROSN).
Gazprom’s shares fell more than 43% at one point last week as investors fled major Russian stocks, with the country’s stock market yet to reopen after closing on Friday.
Shares in Shell were down 0.35% to 1965.p at 08:23 GMT this morning following the announcement, faring better than the 7% drop BP experienced yesterday following a similar exit.