Russia's Novatek to acquire Shell's stake in Sakhalin-2 for $1.16 billion

April 12, 2023 12:28 PM MSK | By Reuters
Image source: Reuters

MOSCOW (Reuters) - Russia's government has approved the sale of Shell's former 27.5% stake in the Sakhalin-2 energy project to Russian energy firm Novatek for 94.8 billion roubles ($1.16 billion), a government order showed on Wednesday.

Russian President Vladimir Putin gave his consent for the transfer of the required funds to Shell, Russian daily Kommersant reported last week.

Following Moscow's decision to send troops into Ukraine in February 2022, Shell said it would quit Sakhalin-2, in which it held a stake worth 27.5% minus one share.

The company booked a $1.6 billion impairment related to Sakhalin-2 in the first quarter of 2022.

In June, the Sakhalin-2 operating company was transformed into a Russian entity via a presidential decree. Shell and Japanese trading companies Mitsui and Mitsubishi were then asked to apply to keep their stakes if they wanted to.

Moscow invited firms interested in obtaining Shell's stake - as well as Exxon Mobil's abandoned share in the sister Sakahlin-1 project - to submit applications to the government.

($1 = 82.0500 roubles)

(Reporting by Reuters; editing by Jan Harvey and Jason Neely)

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