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7 Apr, 2022 12:40

Oil major reveals the cost of leaving Russia

Shell to write off as much as $5 billion in assets due to exit
Oil major reveals the cost of leaving Russia

British oil giant Shell has confirmed a potential hit to the company of €3.7-€4.6 billion ($4 to $5 billion) from offloading its Russian assets as the company decided to pull out of the country amid Western sanctions.

“For the first quarter 2022 results, the post-tax impact from impairment of non-current assets and additional charges (e.g. write-downs of receivable, expected credit losses, and onerous contracts) relating to Russia activities are expected to be $4 to $5 billion,” the London-based multinational said in a statement on Thursday.

Further details of the impact of ongoing developments in Ukraine will be set out in Shell’s first-quarter earnings report on May 5.

Shell announced plans to “withdraw from its involvement in all Russian hydrocarbons” in March, citing Moscow’s military operation in Ukraine. The company also said it would immediately cease all spot purchases of Russian crude oil.

Later, the oil company had to apologize for purchasing Russian crude in March, pledging to commit the profits to humanitarian aid for Ukraine.

“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,” the latest statement reads.

Shell’s share price fell 1.8% in early trade on Thursday.

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