Shell writes down up to $5bn after offloading Russian assets

theguardian.com:

The oil company Shell has confirmed it will take a hit of between $4bn and $5bn (£3.1bn and £3.8bn) from offloading its Russian assets as the firm pulls back from the country.

Bosses said they will no longer buy oil on the spot market but will continue to fulfil contracts on buying fuel from Russia signed before the invasion of Ukraine.

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.”

It added that the state of the global oil markets remained “volatile”.

Last month, Shell’s boss was forced to apologise after buying oil on the spot market from Russia at knockdown prices.

The update on the cost of no longer doing business in Russia includes Shell quitting joint ventures with Gazprom.

The company said previously that it would offload a 27.5% stake in a Russian liquefied natural gas facility, a 50% stake in an oilfield project in Siberia and an energy joint venture.

It will also end its involvement in the Nord Stream 2 pipeline between Russia and Germany, which has been put on hold by ministers in Berlin.

Updating the stock market on its expected results for the first three months of the year, Shell added there will be a pre-tax depreciation of $1.2bn to $1.4bn in its integrated gas division.

There is also expected to be a depreciation in its upstream business of $2.8bn to $3.1bn, $700m to $900m for oil products and $250m to $300m for its chemicals division.