HomeBusinessShell and BP could find it 'impossible' to work in Russia if...

Shell and BP could find it ‘impossible’ to work in Russia if it invades Ukraine

Experts warn Shell and BP could find it ‘impossible’ to work in Russia if it invades Ukraine

Shell and BP could find it ‘impossible’ to work in Russia if it invades Ukraine, experts have warned. 

Western countries have threatened to impose crippling sanctions on Moscow after it began building up troops on the Ukrainian border. 

The US, UK and EU are drawing up plans to hit Russian gas projects with severe restrictions. This could put a stranglehold on one of the country’s most important industries. But it could also deepen the energy crisis gripping Europe. 

The sanctions could still put important company partnerships in jeopardy and deprive them of cash in the long-term.

 Analysts said soaring oil prices could cushion the blow for Shell, BP and other firms affected by the rules.

Crude prices hit fresh seven-year highs of almost $92 a barrel last night. 

Shell works in Russia with energy giant Gazprom and BP with state-backed oil firm Rosneft, in which the British group owns an almost 20 per cent stake. 

Shell became a ‘strategic partner’ of Gazprom when it first signed on to develop the Nord Stream 2 pipeline. 

The energy giant is working on Sakhalin-2, a huge oil and gas project in the Sea of Okhotsk off Siberia with Gazprom, Mitsui and Mitsubishi. 

Berlin-based energy market expert Dr Thomas O’Donnell said if Russia invaded and sanctions were imposed ‘any company’s business in Russia will be difficult to maintain’. 

James Waddell, head of European gas at Energy Aspects, said: ‘Europe looking to hit long-term Russian gas production capacity would likely be a step up from anything we’ve seen before.’ 

Politicians and analysts believe Russia is purposely sending less gas to Europe to pressure Germany into approving the opening of the gas pipeline Nord Stream 2, which runs through Ukraine. 

Victoria Scholar, head of investment at Interactive Investor, said: ‘Sanctions have the potential to pose a notable threat to the oil giants operating in Russia, including BP and Shell.’ 

But, Scholar added, high oil prices mean it could ‘weather’ sanctions, ‘provided that oil prices continue to go up’. 

A BP spokesman said: ‘BP’s stake in Rosneft is an important part of our portfolio.’ 

Shell declined to comment.


Source link

Must Read