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Shell (SHEL) Withdraws From Russia's Salym Petroleum Project

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Shell Plc (SHEL - Free Report) , one of the world's largest oil and gas companies, has recently withdrawn its involvement in the Salym Petroleum Development in Russia. This marks a significant moment in the company's history, as it has been operating in the region for over two decades.

The decision to exit the Salym project was made as part of Shell's ongoing strategy to streamline its global portfolio and focus on areas where it can generate maximum returns.

The company has been divesting its non-core assets and reducing costs in recent years, in order to become more competitive and adapt to changing market conditions.

Salym Petroleum Development was a joint venture between Shell and Gazprom Neft, with the former holding a 50% interest in the project. The venture was launched in 1996 to develop oil fields in the West Siberian Basin and has since produced over 200 million barrels of oil.

Despite its success, the Salym project was not considered a strategic asset for Shell, and the decision to divest was made after a comprehensive review of the company's portfolio. The withdrawal was completed on Dec 22, 2022, and the stake was sold to Gazprom Neft for $233 million.

While the sale of the Salym stake will have a limited impact on Shell's overall production, it is an important step in the company's efforts to simplify its portfolio and focus on areas of higher revenue generation. Shell is currently investing in a range of new technologies, such as carbon capture and storage, renewable energy and electric vehicle charging, as it seeks transition to a low-carbon future.

The withdrawal from the Salym project also reflects the broader trend of international oil companies reducing their exposure to Russia, due to political and economic risks. Sanctions imposed by Western countries in response to Russia's Ukraine invasion in 2022 have made it more difficult for foreign companies to do business in the country.

The withdrawal is also a clear indication of the company's commitment to strategic focus and adaptability in a changing industry. As the energy transition accelerates, companies will need to be proactive in adapting to the new energy landscape.

Shell, a multinational energy and petrochemical company, headquartered in London, engages in the exploration, extraction, marketing and transportation of crude oil, natural gas and natural gas liquids. It also produces gas-to-liquid fuels and other products.

Zacks Rank and Key Picks

Currently, Shell carries a Zacks Rank #3 (Hold). Investors interested in the energy sector might also look at some better-ranked stocks like NGL Energy Partners (NGL - Free Report) sporting a Zacks Rank #1 (Strong Buy) and Energy Transfer (ET - Free Report) and Halliburton (HAL - Free Report) both holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

NGL Energy Partners: NGL Energy Partners is worth approximately $509.53 million. Its shares have increased 48.8% in the past year.

NGL Energy Partners LP is a limited partnership company that operates a vertically-integrated propane business with three segments — retail propane, wholesale supply and marketing, and midstream.

Energy Transfer LP: Energy Transfer LP is valued at around $40.85 billion. ET delivered an average earnings surprise of 11.43% for the last four quarters, and its current dividend yield is 9.48%.

Energy Transfer LP currently has a forward P/E ratio of 9.17. In comparison, its industry has an average forward P/E of 9.40, which means Energy Transfer LP is trading at a discount to the group.

Halliburton: Halliburton is valued at around $35.16 billion. In the past year, HAL stock has increased 3.4%.

Houston, TX-based Halliburton Company is one of the largest oilfield service providers in the world, with a trailing four-quarter earnings surprise of roughly 5.87%, on average.

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