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More Energy Giants Cut Ties With Russian Ventures Over Ukraine Invasion

More Energy Giants Cut Ties With Russian Ventures Over Ukraine Invasion

Brace yourself for high inflation and exploding energy costs: Biden halts new drilling in legal fight over “climate costs”.

Last week, I reported that energy company BP is abandoning its stake in Russian oil giant Rosneft in an abrupt and costly end to three decades of operating. The move marked the most significant action by a Western company in response to Moscow’s invasion of Ukraine at that point.

Now more energy firms have joined the energy Exodus. To begin with, Exxon Mobil announced it would exit Russia’s oil and gas operations valued at more than $4 billion and halt new investment.

The decision will see Exxon pull out of managing large oil and gas production facilities on Sakhalin Island in Russia’s Far East, and puts the fate of a proposed multi-billion dollar liquefied natural gas (LNG) facility there in doubt.

“We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people,” the company said in a statement critical of the intensifying military attacks.

…Exxon, which is scheduled to meet with Wall Street analysts on Wednesday, did not provide a timetable for its exit, nor comment on potential asset writedowns. Its Russia assets were valued at $4.055 billion in its latest annual report, filed in February.

Earlier, Exxon began removing U.S. employees from Russia, two people familiar with the matter said. The number of staff being evacuated was unclear. The company sent a plane to Sakhalin Island to retrieve staff, one of the people said.

Additionally, Shell, Europe’s largest oil company, said that it would exit its joint ventures with Gazprom, the Russian natural gas giant.

We are shocked by the loss of life in Ukraine, which we deplore, resulting from a senseless act of military aggression which threatens European security,” said Shell’s chief executive officer, Ben van Beurden, in a news release.

Shell also said it intends to end its involvement in the Nord Stream 2 pipeline project, which is intended to bring natural gas from Russia directly to Germany. The German government blocked that project last week in response to Russia’s actions.

At the end of 2021, Shell had around $3 billion in non-current assets in its Russian ventures. The company said it expects the decision to exit those joint ventures with Gazprom and related entities will affect the book value of Shell’s Russia assets, leading to impairments, the company said in the release.

Its involvement with Gazprom includes a 27.5% stake in Sakhalin-2, an integrated oil and gas project located on Sakhalin island; 50% of a joint venture developing the Salym fields in western Siberia, and 50% in an exploration venture in the Gydan peninsula, also in Siberia. Shell is one of five energy companies that have each committed to provide financing and guarantees for up to 10% of the estimated €9.5 billion cost of the Nord Stream 2 project..

Meanwhile, get prepared for even more inflation and an escalation in energy prices. As oil giants exit Russia, Biden is indefinitely freezing decisions about new federal oil and gas drilling.

The move was a response to a recent federal ruling that blocked the way the Biden administration was calculating the actual cost of “climate change.”

Under President Barack Obama, the government estimated that the damage from wildfires, floods and rising sea levels was $51 for every ton of carbon dioxide generated by burning fossil fuels. President Donald J. Trump lowered that number considerably, setting it at $7 or less per ton. Upon taking office, Mr. Biden revived the $51 level and set about updating it further — work that is underway.

Known as the “social cost of carbon,” the metric is designed to underline the potential economic threats from greenhouse gas emissions so they can be compared to the economic benefits from acts like oil drilling. Economists and climate scientists say it is needed because climate-fueled heat waves, storms, wildfires and flooding already cost the United States billions of dollars annually but those costs are often not taken into account by policymakers. Factoring in those costs could make it harder for fossil fuel projects to win federal approval.

But 10 Republican-led states sued the government, and on Feb. 11, Judge James D. Cain Jr. of the U.S. District Court for the Western District of Louisiana found that the Biden administration’s calculations “artificially increase the cost estimates” of oil and gas drilling.

Judge Cain, a Trump appointee, said using the social cost of carbon in decision-making would harm his native Louisiana and other energy producing states. He issued an injunction preventing the administration from considering the metric. The Justice Department said it intends to appeal.

It took 37% approval numbers to get Biden to change covid policy. Perhaps, when inflation is high enough, and the polling is low enough, The Science will allow the recalculation of energy costs, and new leases will be approved.

Any guess on the Biden approval number that would trigger a revision of “climate crisis” policies? I am thinking 33%.

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Comments

The Gentle Grizzly | March 3, 2022 at 9:23 am

Note that none will cut any ties – if they have any – with China.

    The international oil companies ARE and have been OPEC from its beginning. They are also the biggest green technology investors (using taxpayer subsidies to make it profitable) so they are hedged. They are NOT on our side except when it is in their interests to be so.

      Yes, an unforced error, the tragic comedy of playing with a doubled-edged scalpel. They thought that they could abort the baby, cannibalize her profitable parts, sequester her carbon pollutants, and have her, too.

There are lots of pieces in play at the moment. Are Exxon and BP cutting ties with Russia only to jump into Iran where sanctions may soon be lifted, as early as today? Are we about to start importing oil from Iran? The Davos crowd is still running things.

Today, Butt Edge Edge explained the reason why they won’t be reopening the XL Pipeline. It’s because they don’t want a “permanent solution to a short-term problem (Ukraine).” So yesterday’s report that the White House was quietly encouraging domestic oil companies to ramp production becomes just another sign of just how duplicitous our leaders are. Even Manchin was quoted to say that Biden just doesn’t understand how we cannot have a modern society without fossil fuels.

There have been signs the last couple of days that the Davos globalist Nazis are losing ground but let’s not kid ourselves that the West is united on one plan. I am banking on US corporations resisting the self-destruction being imposed on them by our politicians and banks to defeat the Davos crowd who only want to stabilize Ukraine and maintain the old status quo. It’s becoming a jump ball lately but there truth buried in here:

https://www.zerohedge.com/markets/kind-january-2008-feel-retail-traders-take-cover-ultra-wealthy-investors-plow-stocks-record

Money talks and right now, the “smart” money is at odds with the “dumb” money that has been winning. Maybe the “smart” money has a case of the yips and finds themselves mal-invested? We’ll see. Right now everyone is just guessing blindly.

    TargaGTS in reply to Pasadena Phil. | March 3, 2022 at 11:45 am

    I believe Secretary Pete has given us the answer to your question…

    “Transportation Secretary Pete Buttigieg: Buying oil from Iran is “on the table”

    https://twitter.com/RNCResearch/status/1499419999722737672

      Bongino is reporting that that the secret meetings between Putin and Brandon are to discuss reviving the Iran deal. Does that tell us everything we need to know about whose side we are on?

      Peabody in reply to TargaGTS. | March 3, 2022 at 1:13 pm

      On his first day in office Biden shut down the US-Canada pipeline because of environmental concerns. The Canadian section is 537 miles and the US section is 1379 miles. That scare tactic is a bunch of bull because:

      The United States already has more than 2.6 million miles of pipelines that deliver trillions of cubic feet of natural gas and hundreds of billions of ton/miles of liquid petroleum products each year.

      Many of those are very old and have been buried for many years using old technology. The new pipeline would have been safer than the old ones already in use.

      What kind of advice is Biden getting? Transporting oil half way around the world in giant super oil tankers that hold up to 2,000,000 barrels is an envrronmental disaster waiting to happen. By comparison the Exxon Valdez oil spill was less than 750,000 barrels.

        Just to be clear, I am not disagreeing with your observations. They are important points that need to be remembered. But it is important for everyone to understand that we now have a golden opportunity to take out the Russian economy by boycotting their oil exports. It will be very painful for awhile but if we get the Europeans educated about Ukraine being THEIR fight to fight rather than waiting us to send OUR soldiers to fight and die, we can finally recalibrate our defense spending to reflect our own national security built around our being THE KEY as an energy-independent exporter to stabilize the global economy. It would also be a major blow to China who has nothing to offer an independent US economy other than cheap slave labor. The petro-dollar is restored and this would once again make the US dollar the unchallenged world reserve currency.

        We could then tell the Davos Nazis to march somewhere else and take their New World Order that requires the US become a 3rd world country with them. I hear Siberia has a green economy. Maybe they will like there.

        The XL Pipeline was built to provide a new, direct access to the Cushing facilities and Texas ports for Canadian production. It was to accommodate Canada. But it also may provide a backbone to tie into for new US production. The American pipeline system may be old but the spine is ultramodern. There are old segments that still need to be upgraded but that is not why XL was built.

        It took me a while to get on board with XL because of all the graft that was associated with it (the usual Clinton, Bush and other family crime syndicates) but it would be a major boon to our energy independence.

    CommoChief in reply to Pasadena Phil. | March 3, 2022 at 11:48 am

    Iran deal is, IMO, likely. The Europeans want it and so do the d/prog. They are already selling their oil to China despite ‘sanctions’ but the west is turning a blind eye. The Iranians can probably push out another 200K to 250K bpd of oil fairly quickly and ramp up to an additional 1M bdp longer term. Russia output is roughly 11M bdp so it won’t fill the void. Nor can/will OPEC or the US, mostly for policy, regulatory reasons in the case of US as you point out. The Saudis already announced they will continue expansion in production very incrementally. Many other non middle east producers suffer lack of investment to maintain/modernize much less expand.

    It’s not just oil though. Nat gas prices have spiked and so far Russia is still selling Nat gas without much friction. They can use those funds to assist in stabilizing the Ruble; likely by continuing their shift away from USD as reserve and into gold. Spring planting is upcoming and lack of fertilizer is going to seriously impact crop yields. Add in disruption in Ukrainian production and it gets worse.

      “The Europeans want it and so do the d/progUNIPARTY SCUMBAGS.

      Fixed it for you. The Uniparty set this up for Putin, whom they put in power after the Soviet Union collapsed, to win. It is critical for the Devos Nazis that the current status quo prevail. They do NOT want to see the collapse of the Russian economy, just ours.

      Just to be clear, I am not disagreeing with your observations. They are important points that need to be remembered. But it is important for everyone to understand that we now have a golden opportunity to take out the Russian economy be boycotting their oil exports. It will be very painful for awhile but if we get the Europeans educated about Ukraine being THEIR fight to fight rather than waiting us to send OUR soldiers to fight and die, we can finally recalibrate our defense spending to reflect our own national security built around our being THE KEY as an energy-independent exporter to stabilize the global economy. It would also be a major blow to China who has nothing to offer an independent US economy that cheap slave labor. The petro-dollar is restored and this would once again make the US dollar the unchallenged world reserve currency.

      We could then tell the Davos Nazis to march somewhere else and take their New World Order that requires the US become a 3rd world country with them. I hear Siberia has a green economy. Maybe they will like there.

        CommoChief in reply to Pasadena Phil. | March 3, 2022 at 12:58 pm

        Phil,

        The BRICS nations, Brazil, Russia, India, China, South Africa among others are most certainly observing how the west EU nations, US, UK, CAN, AUS, NZ are using the financial systems of the west as a club v Russia.

        The Davos/globalist crowd is jumping feet first to try and turn their control over the financial system into a weapon. Note that previously neutral Nations; the Swiss, Sweden are piling in as well. IMO, this makes it more likely that these Nations come up with an alternative to the USD as the settlement currency and as the reserve currency. That is a very real possibility. If it happens then financing the US debt gets much more difficult, which results in a crowd out effect on other govt spending. Turn off or significantly reduce the various public assistance programs and see how quickly our society holds up.

        Ironically the Russians are as opposed to the Davos/globalist crowd as you and I. That doesn’t make them our allies but this incessant narrative of Ukraine = democracy = good being touted is dangerous. First it’s not accurate and secondly look at who is pushing it and their motives. This is a hugely complex story that defies simplistic labels. The amount of propaganda regarding Ukraine while ignoring that the US State Dept/CIA was backing/instigating the orange revolution is staggering.

Meanwhile, as the national media focuses on Ukraine, incontrovertible evidence of election fraud in Wisconsin, much of it in nursing homes, is smothered with a pillow by the media, including the mainstream conservative outlets.

    It’s not national media. Just mentioning it here makes heads explode among the Trump haters. It is proving to be a hopeless task getting people out of their mazes. Some truth is just unacceptable and cannot be processed by the adamantly willfully ignorant.

Lucifer Morningstar | March 3, 2022 at 7:00 pm

. . . did not provide a timetable for its exit, nor comment on potential asset writedowns.

And if Exxon Mobile had the balls to do it they would render all their assets on the ground in Russia unusable. And if that means a creative use of high explosives and/or sabotage then so be it. They should leave nothing that the Russians could use.