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Shell backs out of Russian oil projects

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In April 2014, following the Russian Annexation of Crimea, Shell COE, Ben van Beurden, was still bowing to Putin and full of ambition for Russian oil and gas projects. 

By John Donovan

In April 2014, Royal Dutch Shell Chief Executive Ben Van Beurden claimed that the company had no plans to change its work with its Russian partners, despite the conflict in Ukraine.

His resolve seems to have crumbled following the imposition of further sanctions by the USA and Europe against the Putin regime.

A number of news articles are reporting that Shell has followed Exxon in suspending tight oil projects in Russia.

According to Reuters, “Oil major Shell has suspended development of hard-to-recover oil in Russia’s Bazhenov formation with Gazprom Neft, Interfax cited Gazprom Neft’s head as saying on Friday, after the West imposed sanctions on Russia over Ukraine.”

Extracts from Russia & India Report published 6 October 2014

Shell followed ExxonMobil’s example, also ceasing its operations in Russia in response to the sanctions. According to Russian analysts, the withdrawal of foreign partners potentially poses a threat to about a quarter of the Russian oil market.

On September 30, Shell’s press service published a statement saying that the sanctions had influenced its plans to develop oilfields in the Khanty-Mansiysk Autonomous Area in Western Siberia.

“At the moment, we are conducting a dialogue with European state entities and our partners regarding the degree of influence of these sanctions,” the statement read.

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