Shell and BP exit Russia

A tanker peeps out of the hatch of a T-64 tank. The Ukrainian army is preparing to defend itself against the invasion of Russia (Shell BP)
A tanker peeps out of the hatch of a T-64 tank (Image: Shutterstock)

Shell and BP have announced they will exit their Russian operations following Russia’s invasion of Ukraine, Reuters has reported.

BP abandoned its stake in Russian oil giant Rosneft in a move that could cost more than $US25 billion, while Shell will quit the flagship Sakhalin 2 LNG plant, in which it holds a 27.5 per cent stake, and which is 50 per cent owned and operated by Russian gas giant Gazprom.

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Shell also plans to end its involvement in the Nord Stream 2 pipeline from Russia to Germany, which it helped finance as a part of a consortium of companies.

Shell said the decision to quit the joint ventures in Russia would lead to impairments. Shell had around $US3 billion ($4.1 billion) in non-current assets in these ventures in Russia at the end of 2021, it said.

“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.

The European arm of Sberbank, Russia’s biggest lender, faces failure, the European Central Bank warned on Monday, after a run on its deposits.

British bank HSBC said it was starting to wind down relations with a host of Russian banks, including the second-largest, VTB, one of those targeted by sanctions, a memo seen by Reuters showed.

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Amid the tightening squeeze, even neutral Switzerland said it was adopting European Union sanctions and freezing assets of some Russian individuals and companies. It joined others by imposing sanctions on President Vladimir Putin and other officials.

Some Western companies were suspending operations while others were drawing up contingency plans as they reviewed the rapidly changing landscape for business with Russia.

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