MOSCOW, July 28. /TASS/. Shell is still working on an agreement to withdraw from the Sakhalin-2 project in Russia in accordance with its rights, the company said in a report.
"On June 30, 2022, a Russian Presidential Decree was passed that aims to transfer licences and assets of SEIC (Sakhalin Energy Investment Company - TASS) into a newly created Russian company that would assume the rights and obligations of SEIC. The decree states that the foreign shareholders will be invited to receive shares in that entity equivalent to their shareholding in SEIC. Shell is assessing its rights and still working towards reaching an acceptable agreement that enables Shell to withdraw in line with all applicable legal requirements and agreements," according to the report.
During the second quarter Shell received part of 2021 dividends from its participation in the project, the document says.
"By the end of this year, all of Shell's long-term 3rd party purchases of Russian crude will stop, except for two contracts with a small, independent Russian producer," the company said.
On July 1, President Vladimir Putin signed a decree, which implies that a Russian company will become the new operator of the Sakhalin-2 project, instead of the Sakhalin Energy company. The property of Sakhalin Energy will be transferred free of charge to the Russian Federation, which will transfer it to a new operator, and all the rights and obligations of the predecessor will be transferred to it. Foreign shareholders of Sakhalin Energy must agree within a month to accept shares in the new company in proportion to the shares in the former company. The controlling stake in it (50% plus one share) belongs to Gazprom, Shell has 27.5% of shares, Japanese Mitsui and Mitsubishi - 12.5% and 10% respectively. The Russian government will decide on the transfer of the share or on the refusal to do so.
On February 28, Shell announced that it was going to withdraw from all joint projects with Russia, including Nord Stream 2 and Sakhalin 2.