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Shell announces loss of control over Salym Petroleum joint venture — report

"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," the report says

MOSCOW, July 28. /TASS/. Shell announced the loss of control over the Salym Petroleum joint venture with Gazprom Neft and the resignation of Shell directors in the joint venture, according to the company's report.

"In July 2022, the Shell directors on Salym resigned. Following recent events, joint control was lost early in the third quarter 2022 and as of that date Salym will be accounted for as a financial asset at fair value, with a carrying value of zero," the company said. According to the document, the company recalled all its seconded employees.

"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," the report says.

The company notes that under the new laws of the Russian Federation, a joint venture may be required to transfer a license and assets to a new company registered in Russia.

TASS sources reported that Shell, which announced its withdrawal from Russian projects in early March, is discussing the sale of its stake in the Salym Petroleum Development, its joint project with Gazprom Neft.

On April 29, Shell began accepting binding proposals from candidates. According to the agency's source, Shell's stake in the project is estimated at about $1 billion.

On March 8, 2022, Shell announced plans to withdraw from Russian oil and gas projects due to Russia's special military operation in Ukraine. The company also assured that it will not buy Russian oil on the spot market and will not renew long-term contracts.

Salym Petroleum Development (SPD) is a joint venture whose shareholders on a parity basis are Shell Salym Development B.V. (part of the Shell concern) and LLC GPN-Salym projects (a subsidiary of Gazprom Neft).