Shell to take a $5bn hit from offloading its Russian assets

The company has confirmed it has not renewed contracts for Russian oil

Big Zero Show 2023

The decision to withdraw from its Russian operations after the war in Ukraine will cost Shell an estimated $5 billion (£3.8bn).

Last month, the energy giant announced plans to exit its joint ventures with Russian energy company Gazprom following the invasion of Ukraine.

That was followed by additional measures that would help Shell cut its ties with Russian oil and gas amid the Ukraine war.

As an immediate first step, the company said it would shut its service stations, aviation fuels and lubricants operations in Russia.

Delivering the first quarter of 2022 update note, Shell said: “For the first quarter 2022 results, the post-tax impact from impairment of non-current assets and additional charges (write-downs of receivable, expected credit losses, and onerous contracts) relating to Russia activities are expected to be $4 to $5 billion (£3 to £3.8bn).

“These charges are expected to be identified and therefore will not impact Adjusted Earnings. Details of the accounting treatment and impact of ongoing developments will be provided at the first quarter 2022 results announcement.”

Regarding its ongoing contracts the company said: “Shell has not renewed longer-term contracts for Russian oil and will only do so under explicit government direction, but we are legally obliged to take delivery of crude bought under contracts that were signed before the invasion.”

Last month, the company was criticised by the Minister of Foreign Affairs of Ukraine for buying Russian crude oil shortly after the war began.

The company apologised and promised to stop buying oil from Russia.

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