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Oil major Shell to write off up to $5 billion in assets after leaving Russia

Royal Dutch Shell products in Torzhok, Russia.

Andrei Rudakov | Bloomberg | Getty Images

Shell has announced it will write off between $4 billion and $5 billion of the value of its assets after it pulled out of Russia following the country’s unprecedented invasion of Ukraine.

Thursday’s announcement offers a first glimpse of the potential financial impact of an exit from Russia for Western oil majors.

“For first-quarter 2022 results, the after-tax impact of non-current asset impairment and additional charges (e.g., receivables impairments, expected credit losses and onerous contracts) related to the Russia business are expected to be $4-5 billion,” Shell said in a statement Thursday.

“These charges should be identified and therefore will not impact adjusted earnings.”

Further details on the impact of ongoing developments in Ukraine will be presented in Shell’s first quarter earnings report on May 5, the company said.

Shell was forced to apologize on March 8 for buying a shipment of deeply discounted Russian oil two weeks after the Russian invasion. It subsequently announced that it was withdrawing from its involvement in all Russian hydrocarbons.

The company said it would no longer buy Russian crude oil and would close its gas stations, aviation fuels and lubricants operations in Russia. The company had already pledged to exit its joint ventures with Russian gas giant Gazprom and its related entities.

This is breaking news and will be updated shortly.


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