No longer partners: Shell terminates joint venture with Rosneft in CPC amid drone attacks
11 December 14:46
The British-Dutch energy company Shell Plc plans to terminate its partnership with Russia’s sanctioned Rosneft within the Caspian Pipeline Consortium (CPC).
Bloomberg writes about this, "Komersant Ukrainian" reports.
This decision is part of Shell’s promise to gradually withdraw from the Russian oil and gas market and is accelerated amid recent drone attacks on the CPC infrastructure in the Black Sea region.
The essence of the changes in the partnership
The CPC is a key pipeline that transports Kazakh oil through Russia to the Black Sea coast. Among its shareholders are several Western and Russian giants.
- Exit from the joint venture: Shell is seeking to liquidate the joint venture with Rosneft through which they jointly own a stake in CPC.
- Retention of the stake: If the partnership is successfully dissolved, Shell will retain its overall stake in CPC (7.4%), but will no longer own it jointly with the Russian energy giant.
- Structure of Shell’s share: Shell’s total stake consists of 3.75% through the JV with Rosneft, 1.75% through direct participation and 2% through its subsidiary BG Overseas Holding Ltd.
Shell has emphasized that it has no plans to withdraw from the wider CPC project as a whole. This is in line with the company’s promise back in March 2022 to gradually withdraw from the Russian market after the start of Russia’s full-scale invasion of Ukraine.
Attacks and Kazakhstan’s response
Shell’s decision comes amid an escalating situation around the CPC infrastructure, which has been the target of numerous drone attacks in recent months.
The attacks have led to a temporary shutdown and a reduction in oil loading. The latest attack took out one of the CPC’s three berthing facilities.
Kazakhstan, for which the CPC is a vital export route, has been urgently looking for ways to redirect its oil exports since the latest attack.
The Kazakh Foreign Ministry called on Ukraine to take measures “to prevent similar incidents in the future.” In response, the Ukrainian Foreign Ministry said that no actions of the state were directed against third parties, allaying Kazakhstan’s concerns.
Shell’s withdrawal from the joint venture with Rosneft is another step towards disintegration of the Russian energy sector from Western companies and may complicate Rosneft’s operations within the consortium.
