1 min read.Updated: 12 May 2022, 06:32 PM ISTJENNY STRASBURG, The Wall Street Journal
Deal is latest example of a Western company finding a local buyer after planning to exit Russia
Shell PLC has agreed to sell its Russian retail-station and lubricants business to oil giant Lukoil PJSC, the latest Western company to find a local buyer for its planned Russia exit.
The deal for the business, called Shell Neft LLC, includes 411 retail stations in Russia and a lubricants-blending plant near Moscow. Shell, which didn’t disclose a deal value, said Thursday the agreement was expected to preserve 350 Shell employees’ jobs in Russia. It said last week that its Russian marketing business, which includes assets in the Lukoil deal, were valued at about $600 million.
Shell said it expects the deal to close by the end of this year. Lukoil said that the assets fit its plans to expand its domestic retail and lubricants business.
The London-based oil major said in March it would exit its Russian hydrocarbons business in phases, including exiting its service stations and winding down purchases of Russian crude. That followed the company’s decision to exit its Russia operations including its joint ventures with energy giant Gazprom PJSC.
It joined other oil giants BP PLC and Exxon Mobil Corp. in ending collaborations in Russia built over decades, leading to billions in losses. Last week, Shell said it took a $3.9 billion posttax charge related to its decision to exit Russia, only slightly denting an otherwise strong quarter bolstered by soaring commodity prices and strong refining margins.
Companies exiting Russia have faced few options in selling assets to non-Russian buyers, according to bankers and others close to the companies. They have also faced questions about whether unloading businesses to Russian companies benefits rather than punishes Moscow, following its February invasion of Ukraine.
In April, Canadian miner Kinross Gold Corp. said it had agreed to sell its giant Arctic Russian mine to a unit of Fortiana Holdings Ltd. for $680 million, marking the first public sale of an asset that a large Western company was leaving behind in Russia. Fortiana is registered in Cyprus and majority controlled by Vladislav Sviblov, an established mining executive in Russia.