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Ukraine: Requests $1 Billion from Shell for its Reconstruction


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Oil and gas giant Shell must donate more than $1 billion from the potential sale of its Russian assets to help rebuild Ukraine , according to a top Kiev official, Politico reports.

In a letter to CEO Wael Sawan, dated April 18 and seen by Politico, Ukrainian President Volodymyr Zelenskyy’s economic adviser Oleg Ustenko called on the company to share with Ukraine any profits from a possible Russian takeover of a stake in Shell’s fossil fuel business in Siberia.

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“Blood Money”

“If completed, this sale will represent the transfer of more than $1 billion in Russian cash to Shell’s accounts. That would be blood money, pure and simple,” Ustenko wrote.

We call on Shell to give the Russian proceeds from sales or dividends to the victims of the war – the same war that these assets have fueled and financed,” he added.

After last year’s full-scale invasion of Ukraine, Shell announced it would withdraw from the Russian market and write off up to $5 billion of assets and investments in the country.

This included a 27.5% stake in the Sakhalin-2 project, a major oil field and offshore gas drilling venture in the Russian Far East. Shell’s rate stands at $1.6 billion for its stake, and the Kremlin’s move to nationalize the field in July last year raised concerns that the company would lose its capital.

But Russian business media reported earlier this week that the government had signed a deal under which the country’s second-largest natural gas producer, Novatek, would buy Shell’s stake for 95 billion rubles — currently worth about $1.16 billion.

Shell declined to comment, but pointed out that the company is not actively involved in any business with ongoing operations inside Russia and is not involved in any current negotiations to sell a stake in Sakhalin-2.

“Moral obligation”

According to the NGO Global Witness, the funds will amount to more than 10% of Ukraine’s total reconstruction bill.

“It would be outrageous if Shell kept this money,” said Louis Wilson, who heads Ukraine policy at the NGO. “This is money that they told the world they’ve written off as a loss, and it’s money that comes directly from the Russian oil and gas sector.”

In March 2022, Shell said it would donate $60 million to humanitarian causes in Ukraine following an outcry over its decision to buy a cargo of Russian crude for refining into petroleum products. Although it was not in breach of sanctions at the time, Shell admitted it was “not the right decision” and apologised.

In an interview with Politico last month, Ukraine’s Energy Minister German Galushchenko urged major energy companies to donate excess revenue to his country.

“A lot of energy companies are making huge windfalls because of the war,” he said. “I think it would be fair to share this money with Ukraine. To help us restore, rebuild the energy sector.”

This idea is supported by EU countries — although the final decision to send cash to Ukraine rests with the companies and their shareholders.

Source: OT


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