'We will not stand by': Shell ends $3bn partnership with Russian gas firm Gazprom

28 February 2022, 18:02 | Updated: 28 February 2022, 19:15

Oil giant Shell has announced plans to sell its stake in all joint ventures with Russian partner Gazprom.
Oil giant Shell has announced plans to sell its stake in all joint ventures with Russian partner Gazprom. Picture: Getty/Alamy

By Sophie Barnett

Oil giant Shell has announced plans to sell its stake in all joint ventures with Russian gas firm Gazprom over Vladimir Putin's "senseless act of aggression" in Ukraine.

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The company said it will sell its 27.5% stake in a Russian liquefied natural gas facility, a 50% stake in an oilfield project in Siberia and an energy joint venture.

It will also end its involvement in the Nord Stream 2 pipeline between Russia and Germany, which has been put on hold by ministers in Berlin.

Shell’s chief executive officer, Ben van Beurden said the firm "cannot - and will not - stand by" as Putin's troops descend on Ukraine.

"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," Mr van Beurden said.

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“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.”

The oil giant also says it will no longer be involved with the Nord Stream 2 gas pipeline, which was due to run between Russia and Germany.

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Earlier in the day Foreign Secretary Liz Truss named Gazprom as one of the three million Russian companies who would be unable to access any funding from UK financial institutions as part of new sanctions.

This means Gazprom will struggle to refinance its debts in years to come.

Shell’s staff in Ukraine have been working to manage the company’s response to the crisis on the ground with Mr van Beurden stating: "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."

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The move comes after the shadow climate secretary, Ed Miliband, called on other energy companies to follow BP’s lead and cut ties with Russia.

He said: "Shell should now follow BP and divest its Russian holdings to isolate the Putin regime. These investments are crucial for Putin’s regime and these companies need to act."

On Sunday oil giant BP announced the firm will end its 19.75% shareholding in Russian oil company Rosneft.

The move sent its shares down by as much as 7.5% on Monday despite rising Brent Crude and natural gas prices.

BP said Russia's attack on Ukraine represented a "fundamental change" in how the company could operate there.

Rosneft is also part-owned by the Russian government, and BP has held a 19.75% stake in the firm since 2013.

Chief executive Bernard Looney also resigned from Rosneft’s board with "immediate effect" and BP's other Rosneft director Bob Dudley also resigned from Rosneft's board.