Shell ends Russia dealings and apologises for oil purchases
Shell has announced it will cease involvement in all Russian hydrocarbons – including crude oil, petroleum products, gas and liquefied natural gas (LNG).
As its first step, fossil fuel giant will stop all spot purchases of Russian crude oil and close its service stations, aviation fuels and lubricants operations in Russia.
The company is planning a phased withdrawal from Russia – and will also not renew term contracts it has for supplies from the country.
Shel has also apologised for its purchase of Russian crude oil last week, amid intense criticism including from Ukraine Foreign Minister Dmytro Kubela.
Chief executive Ben van Beurden explained: “We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel – despite being made with security of supplies at the forefront of our thinking – was not the right one and we are sorry. As we have already said, we will commit profits from the limited, remaining amounts of Russian oil we will process to a dedicated fund.”
The decision to exit the Russian market follows its announcement last week to cut ties with the Nord Stream 2 pipeline project and multiple investments with Gazprom including its 27.5 percent stake in the Sakhalin-II liquefied natural gas facility, its 50 percent stake in the Salym Petroleum Development.
Shell was one of multiple energy giants to exit the Russian market earlier this month, including BP, ExxonMobil and Equinor after the country invaded Ukraine.
The company has also highlighted the latest threats from Russia to cut off Europe’s energy supplies.
Shell’s boss argued the latest moves from the Kremlin expose “the difficult choices and potential consequences we face” as the West divests from Russian energy supplies.
He also suggested it was up to governments to decide on the “incredibly difficult trade-offs” following Russia’s invasion of Ukraine, and committed to working with them to manage the security of energy supplies.
van Beurden said: “These societal challenges highlight the dilemma between putting pressure on the Russian government over its atrocities in Ukraine and ensuring stable, secure energy supplies across Europe.”
Commenting on the timeframe of current withdrawal moves, he said: ” In close consultation with governments, we are changing our crude oil supply chain to remove Russian volumes. We will do this as fast as possible, but the physical location and availability of alternatives mean this could take weeks to complete and will lead to reduced throughput at some of our refineries. “