On April 7, local time, oil giant Shell said in a statement that the company’s withdrawal from the Russian market would result in asset write-offs of up to $5 billion.
This statement is an update to Shell’s first quarter 2022 results. It stated that the after-tax loss to the company from impairments of illiquid assets, credit losses and onerous contracts related to the Russian market will reach 4 billion to 5 billion US dollars, higher than the company’s previous estimate of 340 million US dollars. The company also stated that the amount of these losses has basically been determined and will not affect the company’s subsequent performance.
The oil and gas industry has been through one of the most turbulent times in decades since the outbreak of the Russia-Ukraine conflict, as Western companies cut off business ties with Russia. Shell has announced the closure of all Russian operations and exit from a joint venture with Russian gas giant Gazprom.
Despite the loss of its Russian business, Shell noted that recent surges in oil and gas prices have boosted trade activity. The company expects earnings from its LNG and oil business to be much higher in the first quarter of 2022 than in the previous quarter.
Withdrawal from the Russian market hit Shell said profit fell by $5 billion in the first quarter. Click on the video to see what it is!