Big Oil continues its retreat from Russia as Shell condemns Putin's 'senseless act of military aggression'

Shell will be pulling out of its joint ventures in Russia.

Valery Sharifulin/TASS/Getty Images

• Shell said it's pulling out of Russia a day after rival BP said it will offload a 20% stake in Rosneft.
• Shell will exit its joint ventures with Gazprom and pull out of the Nord Stream 2 pipeline project.
• Russia is the world's third-largest oil producer and a major gas exporter to Europe.

Oil giant Shell will be pulling out of Russia — the latest in a corporate exodus from the resource-rich country.

"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," Shell CEO Ben van Beurden said in a statement Monday.

The London-based company announced it's divesting from its joint ventures with Russian majority state-owned energy company Gazprom and related businesses. It will also be pulling out of the Nord Stream 2 pipeline project, which was built to transport gas between Russia and mainland Europe.

The corporate exodus from Russia is significant as many companies have piled into oil-rich Russia in the last three decades since the fall of the Soviet Union. Shell's announcement is the latest example of the concrete financial action many firms are taking in addition to issuing statements condemning Russia's actions in Ukraine.

Shell's exits will lead to impairments, the oil supermajor said. Shell had around $3 billion worth of assets in its Russian ventures at the end of 2021, the company said.

Shell's announcement came a day after rival BP said it's dumping its 20% stake in the Russian state-backed oil giant Rosneft. BP's chair, Helge Lund, said Russia's invasion of Ukraine was the "fundamental change" that put an end to the two energy giants' 30-year business partnership. BP will take a $25 billion non-cash hit from the move by the end of the first quarter.

Norway's energy group Equinor — majority-owned by the Norwegian state — also said it plans to divest from its joint ventures in Russia. It had $1.2 billion in non-current assets in Russia and also expects impairments from the exit. 

Norway's sovereign wealth fund — the world's largest — has also said it will divest its Russian assets.

Russia is the world's third-largest oil producer behind the United States and Saudi Arabia, according to the International Energy Agency (IEA). Russia is also a major gas exporter to Europe, accounting for about one-third of the European Union and the UK's demand in 2021, per the IEA.

Shell pledged to work through concerns regarding energy supplies to Europe and other markets. It said it stands by its decision.

"Our decision to exit is one we take with conviction," said Shell's van Beurden. "We cannot – and we will not – stand by."

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