Shell plc (Shell) issued a first-quarter 2022 update on April 7, announcing a loss in value of assets and other charges between $4-5 billion for activities relating to Russia. The quarter’s earnings report, scheduled for release on May 5, will detail the accounting treatment for the losses.
On March 8, Shell announced a phased withdrawal from all Russian hydrocarbons in response to the Ukraine war. It stopped purchasing Russian crude and is shutting down the roughly 500 service stations in the country. In addition, Shell has halted its aviation fuel and lubricant operations there.
The company also issued a plan for ending all of its joint ventures with Russian oil giant Gazprom, which involves Shell selling its 27.5% stake in a liquified natural gas plant and its 50% stake in two Siberian oilfield projects. Shell will no longer enter into agreements with Russian vessels.
The company’s reaction to the Ukraine crisis has not been entirely uniform or without criticism. Shell came under heavy criticism when news outlets reported on March 4 that it purchased a cargo of Russian crude oil at a bargain price.
A company spokesman said the move was necessary to continue the production of essential fuels relied upon by people and businesses. The explanation did not sit well, and on March 5, Ukraine’s Foreign Minister, Dmytro Kuleba, tweeted a condemnation of the Shell purchase.
Three days later, Shell announced its plan to cease business activity with Russia.
Shell is a publicly-traded company with a global presence. Its primary listing is with the London Stock Exchange (LSE), and its secondary listings are with Euronext Amsterdam and The New York Stock Exchange.
One of the largest companies in the world, Shell reported revenues of over $260 billion in 2021. The company is vertically integrated, engaging in every oil and gas industry area, including exploration, drilling, refining, transportation, and distribution. It is considered a “supermajor” in the industry and has ranked in the top ten Fortune Global 500 since 2000.
So the outrageous increase in Gas here will keep them in the multi billionaire class. I think the part that really rubs me raw is the we subsidize the search for oil, drilling for oil, building pipelines for oil and then we don’t make them pay any of it back