Oil and fuel big Shell should donate greater than $1 billion in surprising earnings from the potential sale of its belongings in Russia to assist rebuild Ukraine, in response to a high Kyiv official.
In a letter to CEO Wael Sawan, dated April 18 and seen by POLITICO, Ukrainian President Volodymyr Zelenskyy’s financial adviser Oleg Ustenko known as on Shell to share with Ukraine any earnings from a possible Russian buyout of the British agency’s stake in a Siberian fossil gas enterprise.
“If accomplished, this sale would symbolize the switch of greater than $1 billion in Russian money into Shell’s accounts. That will be blood cash, pure and easy,” Ustenko wrote.
“We name on Shell to place any Russian sale or dividend proceeds to work for the victims of the conflict — the identical conflict that these belongings have fuelled and funded,” he added.
Following the full-scale invasion of Ukraine final 12 months, Shell introduced it could exit the Russian market and write off as much as $5 billion of belongings and investments within the nation because of this.
That included a 27.5 % stake within the Sakhalin-2 challenge, a significant oil discipline and offshore fuel drilling enterprise within the Russian far east. The corporate wrote down round $1.6 billion for its stake within the website, and the Kremlin’s transfer to nationalize the enterprise in July final 12 months raised issues the agency would lose its capital.
Nevertheless, Russian enterprise media reported earlier this week that the federal government signed off on a commerce by which the nation’s second-largest fuel producer, Novatek, would purchase out Shell’s stake for 95 billion rubles — at the moment value round $1.16 billion. Shell has beforehand stated it isn’t concerned in any negotiations on the difficulty.
Shell declined to provide a public remark, however identified that the corporate just isn’t actively engaged in any enterprise with ongoing operations inside Russia, just isn’t social gathering to any present negotiations for the sale of a stake in Sakhalin-2 and has no readability over what would occur to the proceeds from such a sale.
“We recognize that as of this second, Shell could not have a selection on whether or not to simply accept this supply,” Ustenko conceded within the letter, however maintained there may be an “overwhelming” ethical case for donating any such earnings.
Rebuilding from the rubble
In keeping with NGO International Witness, the funds would quantity to greater than a tenth of the whole restore invoice for assaults on Ukraine’s vitality infrastructure, which a U.N. report final week warned might be as excessive as $10 billion.
“It will be egregious if Shell saved this cash,” stated Louis Wilson, who leads Ukraine coverage on the NGO. “That is cash they’ve instructed the world they’ve written off as a loss and it is cash that comes straight from the Russian oil and fuel sector. Shell has already set a precedent that earnings from the conflict ought to go to Ukraine.”
In March 2022, the vitality agency stated it could donate $60 million to humanitarian causes in Ukraine following an outcry over its determination to buy a cargo of Russian crude to be refined into petroleum merchandise. Whereas the commerce didn’t contravene sanctions on the time, Shell admitted “it was not the appropriate determination” and apologized.
In an interview with POLITICO final month, Ukrainian Vitality Minister German Galushchenko urged main vitality firms to donate extra revenues to his nation.
“Lots of vitality firms get monumental windfall earnings because of the conflict,” he stated. “I feel it could be honest to share this cash with Ukraine. To assist us to revive, to rebuild the vitality sector.”
That concept is getting some assist from EU international locations — though the ultimate determination of whether or not to ship money to Ukraine is as much as firms and their shareholders.