Business

Shell to exit all Russia operations after Ukraine invasion, joining BP

Shell will exit all its Russian operations, including a major liquefied natural gas plant, it said on Monday, becoming the latest major Western energy company to quit the oil-rich country following Moscow’s invasion of Ukraine.
The decision comes a day after rival BP abandoned its stake in Russian oil giant Rosneft in a move that could cost the British company over $25 billion. Norway’s Equinor also plans to exit Russia.

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Shell said in a statement it will quit the flagship Sakhalin 2 LNG plant in which it holds a 27.5 percent stake, and which is 50 percent owned and operated by Russian gas giant Gazprom.
Shell said the decision to exit Russian joint ventures will lead to impairments. Shell had around $3 billion in non-current assets in these ventures in Russia at the end of 2021, it said.
“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,” Shell Chief Executive Ben van Beurden said in a statement.
Rival BP’s Chief Executive Bernard Looney called an urgent meeting with his leadership team on Thursday, just hours after the first Russian bombs fell on Ukrainian capital Kyiv last week, two BP sources told Reuters. Russia calls its actions in Ukraine a “special operation.”
During that previously unreported meeting, Looney made it clear the company’s investment in Rosneft had become untenable, the sources said.
“There was only one decision we could make,” one of the BP insiders said. “The exit was the only viable way.”
Looney held two more board meetings at the weekend, after which board members voted to immediately exit the Rosneft stake, the sources said.
Looney also spoke to British Business Secretary Kwasi Kwarteng on Friday, when Kwarteng expressed his concern about BP’s interests in Russia. Kwarteng welcomed BP’s decision to exit on Twitter on Sunday.

Shell

Kwarteng had a similar message for Shell on Monday.
“Shell have made the right call to divest from Russia,” he said on Twitter, adding that he had spoken to van Beurden earlier on Monday.
The Sakhalin 2 project, located off Russia’s northeastern coast is huge, producing around 11.5 million tonnes of LNG per year, which is exported to major markets including China and Japan.
For Shell, the world’s largest LNG trader, leaving the project deals a blow to its plans to supply gas to fast-growing markets in the coming decades.
Shell said the Russia exit will not affect its plans to switch to low-carbon and renewables energy.
The company also plans to end its involvement in the Nord Stream 2 Baltic gas pipeline linking Russia to Germany, which it helped finance as a part of a consortium of companies. Germany last week halted the project.
Shell will also exit the Salym Petroleum Development, another joint venture with Gazprom.
Together, Salym and Sakhalin 2 contributed $700 million to Shell’s net earnings in 2021.
“Right decision by the Board of Shell to exit its Russian ventures,” Adam Matthews, chief responsible investment officer for the Church of England Pensions Board, which invests in Shell, said in a LinkedIn post.
“Following BP’s decision the focus is on those that have yet to take such a step,” Matthews said.
Japanese trading houses Mitsui & Co and Mitsubishi Corp, which own stakes of 12.5 percent and 10 percent in Sakhalin 2 respectively, said separately that they are examining Shell’s announcement. They said they would consider the situation with the Japanese government and partners for the project, without giving any further details.
Norway’s Equinor, majority owned by the Norwegian state, said earlier on Monday that it would start divesting from its joint ventures in Russia. That came after the country’s sovereign wealth fund, the world’s largest, said on Sunday it would divest its Russian assets.
Other Western companies including global bank HSBC and the world’s biggest aircraft leasing firm AerCap said they plan to exit Russia as Western governments ratchet up economic sanctions on Moscow.

Business

Iraq boosts gold reserves by two percent in single day in gradual buildup

Iraq’s central bank boosted its gold reserves by about 2 percent in a single day last week as part of what it calls a gradual plan to stock up on the precious metal that’s seen as a traditional haven in times of economic distress.

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Iraq bought 2.5 tons of bullion on Thursday to bring its reserves to 132.73 tons, Mazin Sabah, director general of the central bank’s investments department, said in an interview in Baghdad. The strategy is to acquire more gold in the second half of the year, Sabah said.

“Our current plan is to buy small quantities over multiple times, not a big quantity in one go, Sabah said.

Central banks around the world are expanding their holdings of bullion amid escalating geopolitical and economic risks. Iraq, OPEC’s second-biggest oil producer, resumed gold purchases in 2022 after a four-year hiatus, under a program to diversify its roughly $100 billion in foreign assets.

Iraq’s central bank bought 34 tons of gold last June, a one-time increase of 35 percent in its holdings. It stores bullion with the Bank of England and the Bank of France.

Sabah said the central bank’s approach is to add to its gold reserves whenever the precious metal’s price reaches a level that matches the investment department’s guidelines.

Gold, which was within touching distance of a record earlier this month, had its third consecutive weekly loss as signs of resilience in the US economy increased the likelihood that the Federal Reserve will keep raising interest rates. The metal is more appealing to investors for returns when rates are low.

Gold demand from central banks fell to 228.4 tons in the first quarter, down 40 percent from the preceding three months, according to a report from the World Gold Council. While that’s still strong, it’s the second straight quarter of decline, a sign the institutions’ historic bullion binge may be coming to an end.

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Business

Ambani-backed EV maker is said to weigh raising $85 mln

Altigreen Propulsion Labs Pvt Ltd. is considering raising about 7 billion rupees ($85 million) in a new funding round as the Indian electric cargo vehicle maker looks to ramp up its production and invest in new models, according to people familiar with the matter.

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The company, which counts billionaire Mukesh Ambani among its backers, is seeking a valuation of around $350 million in the new round, said one of the people, who asked not to be identified as the information is private. Some of its existing investors could tag along and sell their shares, the people said.

Deliberations are at an early stage and details of the fundraising could still change, the people said. Altigreen Chief Executive Officer Amitabh Saran confirmed to Bloomberg News that the company is in the midst of fundraising and targets to wrap it up by July.

Founded in 2013, Altigreen designs and manufactures electric cargo three-wheelers and has an annual production capacity of 55,000 vehicles, according to its website.

The firm raised around 3 billion rupees in a series A round last year that was led by Sixth Sense Ventures. Ambani’s Reliance New Energy Ltd., Xponentia Capital Partners, Momentum Venture Capital and Accurant International also participated.

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Binance taps Teng to run all regional markets in swift ascension

Binance tapped Richard Teng to head all its regional markets outside of the US, a swift and steady ascension for the executive that joined the world’s biggest crypto exchange just under two years ago.

Teng’s new position, effective Monday, is an expansion of his previous role leading Asia, Europe, Middle East and North Africa, according to a company spokesperson. He joined the firm in August 2021 as Chief Executive Officer of Singapore, and rapidly climbed the ranks amid a tumultuous time in the digital assets sector.

Teng’s expanded responsibilities comes at a time when Binance is under fire from US authorities over compliance issues. Outside of the US, there have been a flurry of developments.

It is launching a new platform for Japan residents after buying a local crypto firm, and its joint venture in Thailand recently secured licenses for a digital exchange. In Australia meanwhile, the permit for its derivatives business has been canceled pending a review of its local operations.

“Richard’s international experience and regulatory background as well as global relationships will be an asset to Binance as it seeks to navigate the complexities of the global regulatory landscape, said Chia Hock Lai, board chairman of the Blockchain Association Singapore.

Teng’s additional responsibilities, which he shared on LinkedIn on Monday, comes just over a month after he took charge of Asia on top of leading Europe, the Middle East and North Africa.

Before joining Binance, Teng held other senior positions in the traditional financial sector. These include being CEO of Abu Dhabi Global Market, chief regulatory officer at the Singapore Exchange Ltd. and director of corporate finance at the Monetary Authority of Singapore, according to his LinkedIn profile.

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