FSUOGM: Ruble slumps amid reports Shell to get over $1bn for Sakhalin LNG stake

Reports that Shell is on track to convert and repatriate more than $1bn in ruble earnings from the sale of its stake in the Sakhalin LNG project have pushed the Russian currency to its lowest level in a year.

International oil majors have had mixed experiences with withdrawing from Russia in response to Moscow’s invasion of Ukraine. ExxonMobil had its assets simply expropriated, while others like Equinor quietly transferred their holdings to Russian partners, and it is unclear whether they received any proceeds from those deals.

Shell’s experience has been unique. As was done with ExxonMobil’s Sakhalin-1 project, Russia’s government last year replaced the international consortium operating the Sakhalin-2 LNG project in the Russian Far East with a Russian firm, Sakhalinskaya Energia. Japan’s Mitsui and Mitsubishi agreed to retain their interests in the project, but Shell, which had vowed to exit Russia in response to its invasion of Ukraine, declined.

What is unique is that Shell is reportedly set to get RUB94.8bn ($1.2bn) from the sale of its interest to top Russian LNG exporter Novatek, according to the Moscow-based Kommersant newspaper.

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