(Bloomberg) — China's leading state-owned energy companies are in talks with Shell Plc to buy their stake in a major Russian gas export project, according to people with knowledge of the matter.
Cnooc, CNPC and Sinopec Group are in joint discussions with Shell on the 27.5% stake in the Sakhalin-2 liquefied natural gas project after the European company announced its exit from Russian operations following the invasion of Ukraine, said the sources cited, who requested anonymity as a matter private.
The talks are at an early stage and it is still possible that an agreement will not be reached with companies, people said. Shell is also open to chatting with other potential buyers outside China, according to one of the people.
The talks include a possible sale of the stake to one of the Chinese companies, to two of the firms or to a consortium of the three.
Shell declined to comment. Representatives of China National Offshore Oil Corp., China National Petroleum Corp. and China Petrochemicals Corp. — as the three Chinese companies are formally known — did not immediately respond to requests for comment.
The State Council's China State Assets Supervision and Management Commission, which oversees state-owned enterprises, also did not immediately respond to a request for comment.
Shell, as well as its rivals, including ExxonMobil Corp., surprised the energy industry by announcing plans to abandon million-dollar Russian assets after the war broke out in Ukraine in February. Earlier this month, Shell reported that his departure from Russia would result in impairment charges of up to $5 billion.
Its London-based competitor BP PLC also contacted state-owned companies in Asia and the Middle East, such as CNPC and Sinopec, as it seeks to get rid of its 20% stake in Russia's Rosneft PJSC, Bloomberg reported last month.
Dozens of Shell employees temporarily assigned to the Sakhalin-2 project in Russia were retired over the weekend to be relocated to other offices as the company moves on its way out.
Russia's war in Ukraine has shaken energy markets and pushed up commodity prices, increasing pressure on governments around the world to rethink their long-term fuel supply planning. China's still close trade relationship with Moscow means that the country's companies are well positioned to acquire shares in projects as Western companies withdraw.
Original Note:
China Energy Giants in Talks for Shell's Russian Gas Stake (1)
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