Promised to stop: Shell resumes Russian gas trade
Even though it’s been over a year since oil giant Shell apologized for buying 100,000 metric tons of crude from Russia in March 2022 and announced it would stop buying Russian oil and gas altogether “as soon as possible” due to to the invasion of Ukraine It continues to trade in Russian gas.
According to Global Witness analysis, the UK-Netherlands joint venture accounted for about one-eighth of Russia’s ship-sourced gas exports in 2022.
Oleg Ustenko, an adviser to Ukrainian President Vladimir Zelensky, accused Shell of accepting “blood money”, while Shell said the transactions were the result of “long-term contractual commitments” and did not violate the law or sanctions.
CONTINUES TRADING DESPITE STOP PROMISE
Shell continues to receive LNG from two Russian ports, Yamal and Sakhalin, even more than a year after saying it plans to withdraw from Russian oil and gas in March 2022.
Recently, on May 9, a large tanker capable of carrying more than 160,000 cubic meters of compressed gas left the port of Sabetta on the Yamal Peninsula in Russia’s far north. According to the BBC news, the cargo was purchased by Shell before leaving for its final destination, Hong Kong.
It was one of 8 LNG cargoes Shell bought from Yamal this year, according to data from the Kpler database analyzed by Global Witness.
According to Global Witness calculations, Shell accounted for 12 percent of Russia’s maritime LNG trade last year and was among the top 5 Russian LNG traders that year.
WITHDRAWAL OF PROJECTS BUT FULFILLED WITH CONTRACTS
In its February 28, 2022 statement, Shell announced that it had decided to withdraw from oil and gas projects in Russia.
Shell was a minority investor in the Sakhalin gas project, but transferred the Russian government’s stake to a local company in September last year and has not bought Sakhalin gas since.
However, Shell is still honoring the contract, which requires it to buy 900,000 tonnes/year from Novatek and Yamal until the 2030s, according to the Reuters news agency.
‘SHELL PUT MONEY IN PUTIN’S POCKET’
The fact that taxes paid by Novatek, Russia’s second-largest gas company, where Shell continues its gas trade, make a significant contribution to the Russian government’s budget, draws criticism.
Oleg Ustenko, one of Ukraine’s presidential advisers, comments on Shell as follows:
“Shell continues to trade in Russian gas, putting money in Putin’s pocket and helping to finance Russia’s brutal offensive against the Ukrainian people. The huge sums that Shell and the entire oil industry have earned in Russia should be used to finance the reconstruction of Ukraine, instead of lining the pockets of its shareholders.”
‘COMPATIBLE WITH LAWS AND REGULATIONS’
Shell, which is the focus of criticism, said in a statement on the subject: “Shell has stopped buying Russian LNG on the spot market, but there are still some long-term contract commitments. “This is fully compliant with sanctions and applicable laws and regulations of the countries in which we operate.”
Stating that there is a dilemma between putting pressure on the Russian government because of the Russia-Ukraine war and ensuring a stable and secure energy supply, Shell said governments must make this difficult choice.