The great decoupling: how UK-based firms are unwinding exposure to Russia
Pressure is mounting on more British businesses to sever ties with Russia after oil giant Shell became the latest company to quit the country, ditching gas projects with the country’s state energy firm Gazprom.
Shell on Monday said it would exit its 27.5% stake in the Sakhalin-2 liquefied natural gas facility, its 50% stake in Salym Petroleum Development and the Gydan energy venture.
A day before, BP announced plans to offload its 19.75% investment in the state oil behemoth Rosneft following international outrage.
Shell has been one of the Russian oil industry’s most important partners thanks to a “global cooperation” pact with Gazprom through which Shell offered expertise and equipment for offshore fossil fuel exploration. It also held a 10% stake worth $1bn in Gazprom’s planned Nord Stream 2 pipeline, which was due to double the flow of Russian gas to Germany, until Berlin called a halt to it earlier this month. It will also exit that project.
“Our decision to exit is one we take with conviction,” Shell’s chief executive, Ben van Beurden, said. “We cannot – and we will not – stand by.”
Shell said its Russian projects are worth about $3bn, while BP said it will incur a $25bn writedown on its decision to offload its Rosneft stake.
“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 van Beurden.
After decades of integration that led to dozens of Russian firms listing on London’s Stock Exchange and City firms spending billions of pounds on Russian shares, British firms are scrambling to decouple from their Moscow counterparts.
Countries around the world are introducing an unprecedented package of sanctions against Russia
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