‘Chinese oil giants prey on Shell property in Russia’ | Financial

Shell declined to comment on Friday’s reportedly advanced talks over the sale of its 27.5% stake in Sakhalin 2. That is the gas and oil project in the east with an ever-investment value of nearly $11 billion. Due to the tough negotiations with the Chinese, the Shell summit in London would also approach other potential buyers to get a favorable price.

Very big discounts

Potential buyers will negotiate very large discounts, analysts say, knowing that Shell wants to get rid of its property quickly. The group, which received the permit in 1992, pumps 9.6 million tons of liquefied natural gas per year, and about 180,000 barrels of oil per day, under favorable weather conditions.

On the other hand, the still unknown offer from the Chinese state-owned companies offers opportunities for guaranteed sales: China does not support the European and American sanctions against President Putin, the three Chinese oil and gas companies can immediately sell and monetize the proceeds from the Sakhalin 2 field.

War

After Russia’s invasion of Ukraine on February 24 and March 8, the wholly British oil and gas group took the decision to divest its years of accumulated investments in protest against the bloody war. It wrote off up to $5 billion on its assets. According to consultant WoodMcKenzie, it is worth $4.1 billion.

These write-offs also apply to investments in liquefied gas projects. It exited its 10% stake in the now-blocked $9.5 billion Nord Stream 2 pipeline. Shell, also strong in commodities trading, also stopped buying Russian crude in the daily market. In addition, all gas stations, the production of jet fuels and lubricants went on sale.

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