20 Feb 2023 10:39

Putin allows Gazprom Neft to acquire Shell's stake in Salym project - presidential order

MOSCOW. Feb 20 (Interfax) - President Vladimir Putin has granted permission for Gazprom Neft to acquire Shell's stakes in the Salym Petroleum and Khanty Mansi Oil and Gas Union projects.

The relevant presidential order, published late on Friday, grants special permission for Gazprom Neft subsidiary GPN-Middle East Projects to acquire 50% of common shares in CJSC Khanty Mansi Oil and Gas Union owned by Shell Exploration and Production (LXVI) B.V. and 50% of Salym Petroleum Development LLC (SPD) owned by Shell Salym Development B.V.

"Other permits, decisions, approvals (preliminary approvals), consent (preliminary consent) and other permit documents (permit documentation) prescribed by the legislation of the Russian Federation are not required for the completion of the transactions specified in this order," the document said.

Shell (SPB: RDS.A) reported earlier that it had signed documents with Gazprom Neft on the sale of its 50% stake in joint venture SPD, which is developing the Salym project in the Khanty Mansi Autonomous District.

In the middle of 2022, Shell stepped away from the management of SPD, removed its representatives from the venture's board of directors, downgraded this asset's value to zero and recognized full impairment in the amount of $233 million. At the end of 2022, as a result of Russian legal changes and court decisions, Netherlands-based SPD was reorganized into Russian company Salym Petroleum Development LLC, in which Shell retained a 50% stake.

A court earlier granted Gazprom Neft's motion to lift injunctions on Shell that prohibited the Anglo-Dutch major from selling its stake in SPD.

Salym is a major production and exploration project in the Khanty Mansi Autonomous District. SPD is developing the Salym group of fields, which includes Zapadno-Salymskoye, Verkhnesalymskoye, Vadelypskoye, Yuzhno-Yamskoye, Vostochno-Shapkinskoye and Salymsky-2, with C1+C2 recoverable oil reserves of 140 million tonnes confirmed by Russia's commission for reserves.

Shell previously announced plans to gradually exit all Russian hydrocarbon projects, including oil, oil products, gas and liquefied natural gas.

Shell's Khanty Mansi Oil and Gas Union joint venture with Gazprom Neft planned to study a number of fields in Western Siberia.