Shell is reported to be in early talks to sell its stake in a Russian natural gas venture to Chinese state energy companies.
The energy giant said in February that it would exit its joint ventures with Gazprom, the vast, Kremlin-backed gas group, including the 27.5% stake in the giant Sakhalin-2 liquefied natural gas project in Russia’s far east.
It is in talks with CNOOC, CNPC and Sinopec, according to both Bloomberg and The Times, which said that a sale could be to one, two or a consortium of all three.
Talks are understood to be at an early stage.
Shell said in February that its Sakhalin-2 stake, combined with its interests in other Gazprom projects such as the Nordstream 2 pipeline, were together valued at $3billion. Then it said it intended to withdraw from Russia altogether after an outcry at its continued purchases of oil, and added this month that it expected impairments related to its exit from Russia of up to $5billion.
China also has been seen as a potential buyer for BP’s 20% in Rosneft, the Russian state oil group, with the potential for an asset swap as CNOOC looks to exit the North Sea.
Biraj Borkhataria, an analyst at RBC Capital Markets, told the Times that “the actual exits and asset sales will be tricky, as these are likely to be government-to-government conversations rather than conversations around the value of the assets themselves”.
"If CNOOC — China National Offshore Oil Corporation — was looking to buy BP’s stake in Rosneft, for example, “it would need the nod from the very top”.
FTSE 100
The FTSE 100 started the day down 46 points at 7,580 after retail sales weakened by more than expected in March as consumers reined in spending in response to spiralling living costs.
Today’s figures from the Office for National Statistics (ONS) showed that retail sales fell 1.4% last month, compared with City expectations for a 0.3% decline.
Companies reporting today