Shell ditched billions of pounds worth of investments in Russia on Monday and cut all ties with Gazprom as western allies announced fresh sanctions on Moscow.
The UK oil giant said it also intends to end its involvement in the Nord Stream 2 pipeline as firms come under pressure to reconsider deals after Vladimir Putin launched a deadly invasion of Ukraine.
“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.
Liz Truss, the foreign secretary, said all Russian banks would be hit with a full asset freeze within days as she announced new powers to limit them clearing payments in sterling, which will initially target the nation’s largest bank, Sberbank.
“With over 50 per cent of Russian trade denominated in dollars or sterling, our coordinated action with the United States will damage Russia’s ability to trade with the world,” she said.
She also said full asset freezes would be imposed on the VEB, Sovcombank and Otkritie banks.
The next steps include legislation to isolate Russian companies from access to UK capital markets, and a ban on exports to Russia in critical sectors. This includes “high-end technological equipment” – including marine and navigation equipment – which “will blunt Russia’s military industrial capabilities”.
She admitted the export ban would hit British companies causing “some economic hardships”, but added: “Those hardships are nothing compared to the people of Ukraine.”
Meanwhile, transport secretary Grant Shapps ordered UK ports to deny access to Russian flagged, registered or operated vessels.
Shell said it had around $3bn (£2.2bn) of assets in its main ventures in Russia.
They included a 27.5 per cent stake in the Sakhalin-2 joint venture, which operates a liquified natural gas facility. Gazprom owns 50 per cent of the venture, based on Sakhalin island in Russia’s far eastern boundary.
“We cannot – and we will not – stand by,” Mr Van Beurden added. “Our immediate focus is the safety of our people in Ukraine and supporting our people in Russia.
“In discussion with governments around the world, we will also work through the detailed business implications, including the importance of secure energy supplies to Europe and other markets, in compliance with relevant sanctions.”