Oil and gas companies reported some of their highest annual profits in history earlier this year, cashing in on gas prices that soared because of Russia’s invasion of Ukraine. But critics say energy giants are indirectly prolonging the war with their record revenues, with some Ukrainian officials even calling for a redistribution of profits to make things right.
All five Western oil majors in Europe and the U.S: BP, TotalEnergies, Shell, Chevron and Exxon Mobil reported record-beating revenue in 2022 as oil and natural gas prices surged to their highest point in a decade. The war helped them rake in $134 billion in excess profits last year, according to one February study from Global Witness, an international NGO focused on human rights abuses and resource exploitation.
Western energy companies have made efforts to cut ties with Russia since the war began, including British giant Shell. The company took a major step toward winding down its business in Russia last week, when the Kremlin approved the sale of Shell’s 27.5% stake in a Siberian energy project to Russian firm Novatek, in a deal worth just over $1 billion. But with the company doubling its profits to $40 billion last year, critics have a different idea for how it should reinvest the proceeds of its forthcoming sale.
“If completed, this sale would represent the transfer of more than $1 billion in Russian cash into Shell’s accounts. That would be blood money, pure and simple,” Oleg Ustenko, an economic advisor to Ukraine President Volodymyr Zelensky, wrote in a letter addressed to Shell CEO Wael Sawan, dated Tuesday and reported by Politico on April 19.
“We call on Shell to put any Russian sale or dividend proceeds to work for the victims of the war—the same war that those assets have fueled and funded,” Ustenko wrote.
Shell pledged last April it would no longer buy Russian oil and quit joint ventures with Russian energy companies, efforts the company said would cost between $4 billion and $5 billion. Its Siberian project, the Sakhalin-2 oil and gas development in Russia’s far east that plans to build one of the country’s largest liquefied natural gas facilities, was a major part of Shell’s Russian interests, but the company wrote off $1.6 billion of the project’s value last year.
Ustenko wrote that while Ukraine acknowledges Shell “may not have a choice on whether to accept this offer,” referring to Novatek’s proposed buyout for Sakhalin-2, the company still had an “overwhelming” moral case to donate the sale’s proceeds.
A Shell spokesperson confirmed the letter’s receipt to Fortune, but otherwise declined to comment.
It isn’t the first attempt Ustenko has made to shed light on Western energy companies continuing to profit from the war, and letters shaming energy giants have almost become a common strategy for Ukraine.
In December, he penned a letter to BP CEO Bernard Looney, accusing the British giant of failing to fulfill a pledge made in February to sell its 19.75% stake in Russian energy company Rosneft. Ustenko accused BP of profiting from the war by receiving dividends from Rosneft, a state-owned company that has helped maintain Russia’s federal budget during the invasion.
A BP spokesperson told Fortune at the time that it was actively trying to sell its stake in Rosneft, but Western sanctions made finding a buyer difficult, adding that the decision to sell its stake led to a $24 billion hit to the company.
BP has yet to sell its stake in Rosneft as of April and is still looking for a buyer, however its most recent production targets announced in April exclude any output from Rosneft, as the company no longer reports production from the Russian firm.
Ustenko reportedly sent another letter to French energy giant TotalEnergies last summer, where he said the company stood to receive $440 million in dividend payments stemming from its 19% stake in Novatek, the same energy firm Shell is exploring a sale of its Russian assets to. Ustenko also called those payments “blood money,” and demanded TotalEnergies reject it or reinvest it toward supporting Ukrainian war victims.
Other Ukrainian politicians have called for oil and gas companies to share some of their windfall profits with the country at war. Ukraine Energy Minister German Galushchenko said in an interview with Politico last month that “it would be fair” for Western energy companies to use some of their massive profits to help rebuild Ukraine’s mangled energy infrastructure.
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