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 worth of its assets after withdrawing from Russia following the country’s unprecedented invasion of Ukraine.
Thursday’s announcement offers a first glimpse of the potential financial implications of a Russian exit for Western oil majors.
“For first quarter 2022 results, the after-tax impact of impairment of long-term assets and additional charges (e.g., write-offs of receivables, expected credit losses and onerous contracts) related to Russia operations is expected to be $4 to $5 amount to billions,” Shell said in a statement on Thursday.
“It is expected that these charges will be identified and therefore not impact adjusted earnings.”
More details on the impact of ongoing developments in Ukraine will be provided in Shell’s first-quarter earnings report on May 5, the company said.
Shell had to apologize on March 8 for buying a heavily discounted batch of Russian oil two weeks after the Russian invasion. It then announced that it would withdraw from its exposure to all Russian hydrocarbons.
The company said it will stop buying Russian crude and will close its service stations, aviation fuel and lubricants in Russia. The company had already promised to exit its joint ventures with Russian gas giant Gazprom and its affiliates.
This is breaking news and will be updated shortly.