Russian Novatek to buy Shell's stake in Sakhalin-2 energy project

Russian company Novatek will buy a 27.5 percent stake in the Sakhalin-2 energy project, currently owned by British company Shell, for 94.8 billion roubles (24.8 billion crowns). The Russian government has approved the sale, Russian news agency TASS reported today.

Shell announced in February last year, following Russia’s invasion of Ukraine, that it would withdraw from the Sakhalin-2 project. In connection with its exit, the company booked write-downs of USD 1.6 billion (34.3 billion crowns) for the first quarter of last year.

The company operating the Sakhalin-2 project was transformed into a Russian entity by presidential decree in June last year. The company’s shareholders – Shell and Japanese trading companies Mitsui and Mitsubishi – were then invited to apply if they wanted to retain their stakes. The Japanese companies agreed to keep their stakes, while Shell decided it did not want its stake.

Moscow also invited companies interested in Shell’s stake, as well as in the stake of US company ExxonMobil, which left the sister project Sakhalin-1, to submit applications to the government, Reuters reported.