Oil and gas group Shell is writing off between 4 billion and 5 billion dollars on its activities in Russia. The company decided to leave the country completely because of the Russian invasion of Ukraine.
Shell expects to lose money through this step, among other things, due to broken contracts, credit losses and other lost income.
Shortly after the raid, Shell announced that it was selling its interests in major projects to extract oil and gas in Russia. At the beginning of March, Shell also decided to close its approximately four hundred gas stations in the country and stop buying oil and gas from the country. Earlier, Shell said its assets in Russia were worth about $3 billion and would write off $400 million by no longer supplying fuel to the country.
The British gas group, which until recently was partly Dutch, had a 27.5 percent interest in Russia, among other things, in a large project for liquefied natural gas (LNG) and oil in eastern Russia, called Sakhalin-II. It is owned by the Russian state gas company Gazprom.
Shell’s peer BP also announced that it was leaving Russia because of the war in Ukraine. Oil and gas company TotalEnergies does not want to part with its properties in the country. These would then have to be sold at a significant discount to a likely Russian party that profits from this, argues the French group.
Due to the war between oil and gas-rich Russia and Ukraine, the prices for these raw materials have risen sharply. In addition to being a producer, Shell is also an important trader in oil and gas. With the trade-in oil products, the group expects to have achieved “significantly higher” results in the first three months of 2022 than in the last quarter of 2021. The LNG trade is also expected to have generated more profit.