Despite High Energy Prices, Shell and BP Shares Drop

March 01, 2022 07:00

On Monday, the Russian stock market remained closed following the weekend, as the nation’s currency fell to an all-time low.

Within the first few hours of the week, the Russian rouble had fallen up to 30% against the US dollar, before Russia’s central bank more than doubled its key interest rate to 20% and ordered energy exporters to convert the majority of their foreign currency holdings into roubles.

As a result, the rouble managed to claw back some of its losses, with the USDRUB currency pair closing the day with a gain of 14%.

Meanwhile, despite high energy prices, energy giants BP and Shell both closed the New York session down by 4.95% and 3.36% respectively.

The declines came as the market reacted to the news that both companies would be offloading their Russian business interests.

Shell announced yesterday that it intends to exit its joint ventures with Russian energy company Gazprom, including its 27.5% stake in the Sakhalin-II natural gas facility and its 50% stake in the Salym Petroleum Development and the Gydan energy venture. Together, these holdings contributed around $700 million to Shell’s net earnings in 2021.

Moreover, Shell will also be ending its involvement in the Nord Stream 2 pipeline, in which it held a 10% stake worth an estimated $1 billion. Shell further reported that, at the end of 2021, it had around “$3 billion in non-current assets” in these Russian ventures.

Shell’s statement followed a similar one from BP over the weekend, who announced on Sunday that they would be exiting their shareholding in Rosneft, a Russian oil company in which they have held a 19.75% stake since 2013.

Rosneft accounts for roughly half of BP’s oil and gas reserves and a third of its production, and BP, who are the largest foreign investor in Russia, stated that the move would come at a cost of $25 billion.

Depicted: Admirals MetaTrader 5 – BP Plc Daily Chart. Date Range: 30 June 2021 – 28 February 2022. Date Captured: 28 February 2022. Past performance is not a reliable indicator of future results.

Depicted: Admirals MetaTrader 5 – BP Plc Weekly Chart. Date Range: 30 August 2015 – 28 February 2022. Date Captured: 28 February 2022. Past performance is not a reliable indicator of future results.


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Roberto Rivero
Roberto Rivero Financial Writer, Admirals, London

Roberto spent 11 years designing trading and decision-making systems for traders and fund managers and a further 13 years at S&P, working with professional investors. He has a BSc in Economics and an MBA and has been an active investor since the mid-1990s