SHELL has clinched a deal to sell its retail and lubricants business in Russia after deciding to withdraw from the country in response to the attack on Ukraine.
The oil and gas giant said it had agreed to sell the 411 petrol stations it operates in Russia and the Torzhok lubricants blending plant to LUKOIL, which is one of the biggest oil and gas firms in the country.
Shell did not disclose financial details of the transaction, which is subject to approval by Russian competition regulators.
The company said its priority was the wellbeing of its employees. It said more than 350 people currently employed by the operations covered by the deal will transfer to the new owner.
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Shell noted the agreement followed the announcement in early March of the group’s intention to withdraw from all Russian hydrocarbons in a phased manner.
Analysts suggested the company could struggle to find buyers for the assets concerned.
These include stakes in the giant Sakhalin-II liquefied natural gas facility in eastern Russia and the Salym Petroleum oil fields venture.
However, when Shell announced first quarter results last week, chief executive Ben van Beurden said it was making progress with efforts to dispose of its interests in Russia. The group booked a $3.9bn first quarter charge related to the phased withdrawal from Russian oil and gas activities.
The group grew first quarter profits to $9.1 billion (£7.3bn) from $3.2bn as it felt the benefit of the surge in oil and gas prices that has left consumers facing big increases in their energy bills.
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LUKOIL said the acquisition of Shell’s high-quality businesses in Russia fits well into its strategy to develop its priority sales channels, including retail, as well as the lubricants business.
Shell said the retail stations involved are mainly in the Central and Northwestern regions of Russia. The Torzhok lubricants blending plant is around 200 kilometres north-west of Moscow.
Founded in 1991, LUKOIL is the second largest producer of crude oil in Russia after Rosneft.
BP announced plans to sell its stake in Rosneft after Russia invaded Ukraine.
A range of other oil and gas firms have said they will quit Russia.
In March US giant ExxonMobil said it would discontinue operations at Sakhalin-1 and make no new investments in Russia.
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