Shell in talks with Chinese state-backed firms as it looks to offload Russian energy stakes
Shell has turned to China, as the energy giant looks to offload its chunky stake in a major Russian gas project.
Chinese state-run firms Cnooc, CNPC and Sinopec are in talks with the FTSE 100 company to buy its holding in the Sakhalin-2 venture, according to Bloomberg.
The company has a 27.5 per cent stake in the liquified natural gas site, with Shell potentially prepared to offload its share to multiple parties.
Discussion remain at an early stage, with Shell also open to talks with buyers outside of China.
However, China’s close trading relationship with Russia makes it well positioned to snap up stakes in projects as Western companies exit.
Shell refused to comment on the reports, when approached by City A.M..
The company is pushing forward with Russia, as dozens of Shell employees on temporary assignment at the Sakhalin-2 project departed over the weekend to be relocated back to other offices.
Following Russia’s invasion of Ukraine, Shell was one of multiple energy giants alongside rivals such as ExxonMobil, BP and Equinor to cut ties with the country.
Since then, the UK has announced plans to phase out purchases of Russian coal and oil by the end of the year.
Shell forecasts that its divestment from Russia will cost the oil and gas giant up to $5bn (£3.8bn).
Its 27.5 percent stake in the Sakhalin-II liquefied natural gas facility (LNG) is one of multiple investments it has made with Gazprom, with Shell also owning a 50 percent stake in the Salym Petroleum Development.
Shell is not the only company reportedly in talks with Chinese buyers, with BP reaching out both CNPC and Sinopec last month as it looks to sell its 20 per cent stake in Russia’s Rosneft.