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Shell plc SHEL, the British oil and gas giant, has entered into an agreement with Ukrnafta, a subsidiary of Naftogaz, to sell 51% of its gas station network in Ukraine. Following the deal’s closure, Ukrnafta will become a majority owner of Shell’s gas station network, which currently includes 118 functional stations. The rebranding will be completed within a year. Additionally, all the 1,550 employees will retain their jobs following the deal’s closure.
Shell ranks among the top 10 fuel distribution networks in Ukraine and 7th in terms of the number of stations. The stations are mostly located in areas with high traffic, ensuring maximum visibility among its customers. Per a statement from Naftogaz Group, earnings from the newly acquired business will contribute to the national budget of Ukraine in the form of dividends.
According to EXPRO, a production consulting firm, natural gas production in Ukraine reached new highs in October since the start of Russia's invasion in February 2022. The gross natural production reached 1.6 billion cubic meters in October 2024, reflecting a 2.3% increase from the prior-year level. This is also the highest production achieved since January 2022.
With this sale, Shell has marked its exit from Ukraine. The sale was confirmed by the energy firm. Due to the prolonged conflict between Russia and Ukraine, many companies have been forced to reconsider their presence in the region. Geopolitical instability and the possibility of operational disruptions have resulted in a challenging business environment, prompting several companies operating in the region to re-evaluate their businesses in both countries.
SHEL’s Zacks Rank and Key Picks
Currently, SHEL carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are Smart Sand, Inc. SND, FuelCell Energy FCEL and Nine Energy Service NINE, each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Smart Sand is a low-cost producer of high-quality Northern White frac sand, an ideal proppant for hydraulic fracturing and various industrial applications. The company provides proppant and other logistics services for several companies in the oil and gas industry. With sustained oil and gas market demand, SND is expected to see growing demand for its services, reflecting a positive outlook.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.