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Quitting Russia is set to cost oil giant Shell up to $5bn

Guardian

Quitting Russia is set to cost oil giant Shell up to $5bn

Quitting Russia is set to cost oil giant Shell up to $5bn, but the surge in oil prices will cushion the blow.

Shell reported this morning that it will write off between $4bn and $5bn (£3bn-£3.8bn) post-tax in asset values after deciding to exit Russia following the invasion of Ukraine.

The bill covers the “impairment of non-current assets” and additional charges such as writing down debts owed by customers and credit losses.

Last month, Shell announced it would withdraw from its involvement in all Russian hydrocarbons, including crude oil, petroleum products, gas and liquefied natural gas, stop importing Russian crude oil, and shut its service stations, aviation fuels and lubricants operations in Russia.

But, Shell has also reported that its oil and gas trading activities will get a boost from soaring energy prices, which jumped after the Ukraine war began.

It says that earnings from oil trading are expected to be “significantly higher” in the first quarter of 2022 than in the fourth quarter of 2021.

The indicative refining margin is around $10.23/bbl, compared to $6.55/bbl in the fourth quarter 2021.

Trading at its integrated gas division are also expected to be stronger than in the previous quarter.

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