Two energy giants, BP and Shell, are pulling billions in investment from Russia

CHICAGO (NewsNationNow) – Two oil and gas giants stop investing in Russia after the invasion of Ukraine, decisions that could have dire consequences around the world.

On Sunday, British Petroleum announced plans withdraw from the shareholder position with Rosneft, a state-controlled Russian oil and gas company. BP has owned 19.75% of Rosneft since 2013. Now that share is estimated at $ 14 billion.

“Like many, I was deeply shocked and saddened by the situation unfolding in Ukraine, and my heart is sincere to all those affected. This forced us to reconsider BP’s position with Rosneft, ”BP CEO Bernard Looney said in a statement.

Russia is the world’s third largest oil producer after the United States and Saudi Arabia. according to the US Energy Information Agency. Oil production in Russia is 11% of the world.

According to reports, BP recently came under pressure from the British government to unload its stake in Russia BBC. Prior to her resignation, BP was one of the largest foreign investors in Russia, according to the company’s website.

Only a day later, Announced by Shell it intends to leave joint ventures with Russian state energy giant Gazprom. This includes a 27.5% stake in Sakhalin II, a key liquefied natural gas project, and a 50% stake in two projects developing oil fields in Western Siberia.

“We are shocked by the loss of life in Ukraine, which we regret as a result of a senseless act of military aggression that threatens European security,” Shell Director-General Ben van Borden said in a statement.

Shell has also said it intends to end its involvement in the Nord Stream 2 gas pipeline controversial underwater project directly connects Russian gas with Europe via Germany.

British-based British Petroleum and Shell are the largest energy companies to come out of Russia so far.

Texas-based ExxonMobil is also investing in Russia, but has not yet said whether to sever ties. A subsidiary of Exxon Neftegas Limited (ENL) owns a 30% stake Sakhalin-1 drilling projectwhich the company advertises as “one of the largest international direct investments in Russia”.

President Joe Biden has imposed economic sanctions aimed at Russian banks, oligarchs and technology, but avoided a direct hit on Russia’s energy sector. In part, this is due to increasing political pressure within the country as gas prices continue to rise.

Last week, Brent oil, produced in the North Sea, jumped in London for $ 100 per barrel for the first time since 2014. World oil prices are now 40% higher than in early December.

It is unclear how Shell and BP’s decisions will affect U.S. gas prices

Over the past two weeks, the average price of a gallon of regular gasoline has risen 10 cents to $ 3.64 a gallon. This price is about a dollar higher than it was a year ago.

Nationwide, the highest average conventional gas price is in the San Francisco Bay Area – $ 4.86 per gallon. The lowest average in Houston is $ 3.14 per gallon.

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