Sanctions imposed by the world’s leading economies on Russia amid the Ukraine invasion are triggering an exodus of some of the biggest energy companies. The latest name on the list is Shell PLC (LON:SHEL), which announced it would quit operations in the country, following the steps of BP plc (NYSE:BP).
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Shell’s Exit
As reported by Fox Business, the announcement means the energy giant is canceling its relationship with Russian colossus Gazprom PAO (MCX:GAZP), which owns 50% of the Sakhalin 2 LNG plant —in which Shell holds a 27.5% stake. Shell is also ending its involvement in the Nord Stream pipeline project.
The announcement arrives a day after BP dropped its stake in Rosneft —NK Rosneft’ PAO (MCX:ROSN)— “a move that could cost the British company over $25 billion,” according to Reuters.
On Shell’s side, pulling out of Russia’s joint ventures could yield impairments as the company had $3 billion in non-current assets by the end of last year.
Shell Chief Executive Ben van Beurden said in a statement: “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.”
More On The Go
There are more “exiters” within the energy sector, including the likes of Norway giant Equinor ASA (NYSE:EQNR) and France’s TotalEnergies SE (EPA:TTE). The former’s CEO Anders Opedal said the company’s position given the current situation is unsustainable.
Other firms from various sectors are pausing operations in the Russian market, among them the giant manufacturer Daimler Truck Holding AG (ETR:DTG), with labor representatives supporting the idea of the German firm dropping its stake in local partner Kamaz PAO (MCX:KMAZ).
Volvo Car AB (STO:VOLCAR-B) and General Motors Company (NYSE:GM) are halting sales in Russia —the American manufacturer “exports about 3,000 vehicles a year to Russia from the U.S.” The Swedish multinational also announced it would stop production in the country.
“Other Western companies including global bank HSBC and the world's biggest aircraft leasing firm AerCap said they plan to exit Russia as Western governments ratchet up economic sanctions on Moscow,” as informed by Reuters.
