Shell intends to exit equity partnerships held with Gazprom entities

Source: press release, 28 February 2022

Ben van Beurden, Shell chief executive officer
Ben van Beurden, Shell chief executive officer (photo: Shell plc)

The Board of Shell plc has announced its intention to exit its joint ventures with 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 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,” says 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,” says 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 USD 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% 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 USD 8.5 billion share buyback programme for the first half of 2022, and we expect to increase our dividend per share by 4% for the first quarter of 2022.