BP abandons Russian oil company stake, Shell pulls out of Nord Stream 2

Shell announced today that it was pulling out of the Nord Stream 2 project and was looking to sell its stakes in other oil and gas projects in Russia.

The decision to exit the investment comes days after the German Chancellor effectively killed the project by suspending its certification. The Dutch company split the cost with four other European energy companies. The other half of the company was controlled by the Russian government. Shell has stakes in two other oil and gas projects in Russia.

Together, the moves could cost Gazprom billions of dollars if the company can’t find buyers or has to take a significant write-down. Given international sentiment at the moment, the latter seems more likely. Altogether, the oil and gas projects represent about 5 percent of the company’s annual production, according to the Financial Times.

Shell CEO Ben van Beurden said in a statement that they were shocked by the loss of life in Ukraine and deplored the act of military aggression which threatens European security.

The decision was announced a day after the company said it would be exiting its stake in the Russian oil company. The British supermajor's write down will be much more expensive because of its shares in the Russian oil company. Shell said it wouldn't find a buyer.

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Helge Lund, the chair of the company, said in a statement.

Russia’s attack on Ukraine is an act of aggression which is having tragic consequences across the region. BP has operated in Russia for over 30 years, working with brilliant Russian colleagues. However, this military action represents a fundamental change. It has led the BP board to conclude, after a thorough process, that our involvement with Rosneft, a state-owned enterprise, simply cannot continue.

Norway’s Equinor also said that it would be exiting its Russian ventures, which are valued at $1.2 billion. Other companies, from semiconductor manufacturers to social media platforms, are either complying with sanctions or being forced to decide whether to continue pursuing the Russian market.

France's Total and the US's ExxonMobil started working in Russia in 1996, five years after the fall of the Soviet Union, and are under pressure to leave.

Western sanctions have hit the Russian economy hard, but they have avoided the energy sector. 40 percent of Europe's natural gas is supplied by Russia, which is one of the world's largest oil and gas producers. Western officials said the decision was made to prevent price spikes for oil and gas, which would help offset any trading losses Russia might experience from energy-related sanctions.

Russian oil and gas revenues accounted for $119 billion and 40 percent of the country's federal budget last year.