Shell Gas Stations and Torzhok Plant Temporarily Closed Amid Russian Sale Talks
Shell gas stations across Russia are expected to suspend operations in the coming days, according to Sergey Starodubtsev, the general director of Shell Oil LLC’s Russian division. The nearby Shell mineral oil plant in Torzhok faces the same temporary shutdown as part of broader owner transition plans.
Starodubtsev explained that the pause for both the retail sites and the Torzhok facility follows the decision to transfer the Russian branch to a new owner. Negotiations surrounding the sale are not yet finalized, and no binding agreement has been reached. The company emphasises that ensuring employee safety, maintaining production integrity, protecting jobs, and complying with Russian law remain top priorities during this uncertain period.
Previously, on May 5, a Forbes insider reported that a buyer had been identified for the Russian unit. This information reportedly reached Shell’s Russian staff, though the new owner’s identity had not been disclosed. The insider noted that Shell’s global leadership set a condition requiring the buyer to continue paying current employees through year-end.
Industry observers note that several market players, including LUKOIL, are closely watching the situation. An unnamed Shell Russia employee suggested that Lukoil could emerge as a potential buyer, given the strategic value of Shell’s Russian network and assets.
Royal Dutch Shell, a major player in the global energy sector, operated a network of gas stations in Russia. As of September 2021, Shell ran 411 car filling stations in the country, with 233 owned directly and 178 operated through dealers. The Torzhok plant, which has a capacity of about 200 million liters per year, produced a range of lubricants including motor oils, marine engine oils, industrial oils, hydraulic oils, and transmission fluids.
Shell first signaled its exit from Russia in early March, announcing plans to close all gas stations, aviation fuel operations, and lubricant production within the country. The company stated it would pursue a safe and orderly wind-down, with the process beginning immediately after the announcement. The focus was on minimizing disruption while safeguarding staff and assets during the transition.
Alongside this retreat, Shell said it would not engage in purchasing Russian crude on spot markets or renewing futures contracts tied to Russian supplies. The intention was to reroute the oil supply chain to exclude Russian feedstocks, while still acknowledging the complexity of disengaging from Russian energy markets. The company underlined that it would explore alternatives to supply oil products and gas from Russia, as part of a broader strategic realignment.
A subsequent statement from Shell’s leadership clarified an error in a recent decision to acquire a shipment of Russian crude. Profits from processing the remaining volumes of Russian oil would be directed to a special fund, with collaboration from aid partners and humanitarian organizations to determine the most effective use of those resources to mitigate the humanitarian impact of the war in Ukraine. The message emphasized accountability and a commitment to supporting Ukraine through targeted aid, with the funds allocated to address urgent needs on the ground.
Executives acknowledged that stepping away from Russian energy supplies is a challenging task that requires coordinated action among government, suppliers, and consumers. In the view of top management, the wartime environment has demanded difficult concessions from authorities, and the path forward would involve careful planning and international cooperation to manage economic and social consequences.
Earlier in the year, amid Western sanctions on Russia, Shell announced its decision to divest its stake in joint projects with Gazprom. The company held a 27.5 percent stake in Sakhalin-2, the first Russian LNG plant, and a 50 percent stake in two joint ventures with Gazprom Neft, Salym Petroleum Development and Gydan Energy. Shell also stated its intention to end its participation in the Nord Stream 2 gas pipeline project in the Baltic Sea. Media reports suggested that Shell could face substantial losses if it exits these projects, underscoring the financial and geopolitical complexities surrounding its exit from Russia. This overview reflects a broader trend of foreign energy companies reassessing presence in the region amid shifting sanctions, market dynamics, and regulatory landscapes, with implications for employees, suppliers, and local communities. (Sources and reporting from industry observers and financial press corroborate these developments.)