Shell had previously said the Russia write-downs would reach around $3.4bn. AFP
Shell had previously said the Russia write-downs would reach around $3.4bn. AFP
Shell had previously said the Russia write-downs would reach around $3.4bn. AFP
Shell had previously said the Russia write-downs would reach around $3.4bn. AFP

Business

Energy

Shell to write off $5bn following exit from Russia

The company is winding down all its Russian operations, including a major LNG plant and oil trading activities

Reuters

April 07, 2022

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Live updates: follow the latest news on Russia-Ukraine

Shell will write down up to $5 billion following its decision to exit Russia, higher than previously disclosed, while soaring oil and gas prices boosted trading activities in the first quarter, the company said on Thursday.

The post-tax impairments of between $4bn and $5bn in the first quarter will not impact the company's earnings, Shell said in an update before its earnings announcement on May 5.

It had previously said the Russia write-downs would reach about $3.4bn.

The start of 2022 marked one of the most turbulent periods in decades for the oil and gas industry as western companies including Shell rapidly pulled out of Russia, severing trading ties and winding down joint ventures following Moscow's military invasion in Ukraine.

  • Members of the Russian police force and Rosgvardia, the country’s domestic army, patrol Red Square, Moscow. AFP
    Members of the Russian police force and Rosgvardia, the country’s domestic army, patrol Red Square, Moscow. AFP
  • A Renault car showroom in St Petersburg. Reuters
    A Renault car showroom in St Petersburg. Reuters
  • An Ikea store in Khimki, about 18 kilometres north-west of Moscow. Bloomberg
    An Ikea store in Khimki, about 18 kilometres north-west of Moscow. Bloomberg
  • Traditional Russian dolls, also known as matryoshki, sit in the window of a Swatch Group wristwatch shop at the GUM department store in Moscow. Bloomberg
    Traditional Russian dolls, also known as matryoshki, sit in the window of a Swatch Group wristwatch shop at the GUM department store in Moscow. Bloomberg
  • A Chanel concession occupies the middle of the lower floor of the GUM department store, on Red Square in the Russian capital. Bloomberg
    A Chanel concession occupies the middle of the lower floor of the GUM department store, on Red Square in the Russian capital. Bloomberg
  • Food manufactured by Nestle sits on display inside the Detsky Mir children’s goods store on Vozdvizhenka St, Moscow. Bloomberg
    Food manufactured by Nestle sits on display inside the Detsky Mir children’s goods store on Vozdvizhenka St, Moscow. Bloomberg
  • US chipmaker Intel Corp’s ‘smart building’ in Petah Tikva, near Tel Aviv, Israel. Intel announced on Tuesday that it was suspending operations in Russia. Reuters
    US chipmaker Intel Corp’s ‘smart building’ in Petah Tikva, near Tel Aviv, Israel. Intel announced on Tuesday that it was suspending operations in Russia. Reuters
  • A woman walks past a closed H&M store in Moscow. Reuters
    A woman walks past a closed H&M store in Moscow. Reuters
  • An electronic billboard on RusHydro’s Institute Hydroproject building in Moscow displays a Samsung advert. Reuters
    An electronic billboard on RusHydro’s Institute Hydroproject building in Moscow displays a Samsung advert. Reuters
  • Customers queue to enter Uniqlo in Moscow. In early March, the Japanese fashion brand said it would stop selling clothes in Russia, having earlier defended its decision to keep its stores in the country open. Reuters
    Customers queue to enter Uniqlo in Moscow. In early March, the Japanese fashion brand said it would stop selling clothes in Russia, having earlier defended its decision to keep its stores in the country open. Reuters
  • A Marks & Spencer store in the Afimall City mall at Moscow International Business Centre. Bloomberg
    A Marks & Spencer store in the Afimall City mall at Moscow International Business Centre. Bloomberg
  • An Apple store at the Aviapark shopping centre in Khoroshyovsky, Moscow, in 2020. Bloomberg
    An Apple store at the Aviapark shopping centre in Khoroshyovsky, Moscow, in 2020. Bloomberg
  • A woman drinks coffee inside a Starbucks cafe in Khimki in 2007. Reuters
    A woman drinks coffee inside a Starbucks cafe in Khimki in 2007. Reuters
  • An employee fills the tank of a car at a BP petrol station in Moscow in 2016. Reuters
    An employee fills the tank of a car at a BP petrol station in Moscow in 2016. Reuters
  • People eat at McDonald’s in central Moscow in 2016. Reuters
    People eat at McDonald’s in central Moscow in 2016. Reuters
  • An advert for US soft drink giant Pepsi sits above a sign for a McDonald's restaurant in Moscow. AFP
    An advert for US soft drink giant Pepsi sits above a sign for a McDonald's restaurant in Moscow. AFP
  • Bottles of Coca-Cola are displayed at Colonial Liquors in Corte Madera, California. In early March, the soft drinks brand said it was withdrawing from the Russian market. AFP
    Bottles of Coca-Cola are displayed at Colonial Liquors in Corte Madera, California. In early March, the soft drinks brand said it was withdrawing from the Russian market. AFP
  • The Netflix building on Sunset Boulevard in Los Angeles, California. The streaming site has suspended its services in Russia. AFP
    The Netflix building on Sunset Boulevard in Los Angeles, California. The streaming site has suspended its services in Russia. AFP
  • TikTok’s UK office in London. The Chinese company has restricted uploads to its social media service in Russia to avoid falling foul of the country’s strict new online publishing rules. AFP
    TikTok’s UK office in London. The Chinese company has restricted uploads to its social media service in Russia to avoid falling foul of the country’s strict new online publishing rules. AFP

Shell said it would exit all its Russian operations, including a major liquefied natural gas plant in the Sakhalin peninsula in the eastern flank of the country. It will also wind down oil trading activities.

Average benchmark oil prices soared past $100 a barrel in the quarter, their highest since 2014, while European gas prices hit a record high.

Shell, the world's largest LNG trader, said earnings from the segment were expected to be higher in the quarter from the previous three months. Earnings from oil trading are set to be "significantly higher" in the quarter.

Cashflow in the quarter would be negatively affected by "very significant" outflows of about $7bn as a result of changes in the value of oil and gas inventories.

SPEC%20SHEET%3A%20SAMSUNG%20GALAXY%20Z%20FLIP%204
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Dubai World Cup Carnival Thursday race card

6.30pm: Dubai Millennium Stakes Group Three US$200,000 (Turf) 2,000m
7.05pm: Handicap $135,000 (T) 1,600m​​​​​​​
7.40pm: UAE Oaks Group Three $250,000 (Dirt) 1,900m​​​​​​​
8.15pm: Zabeel Mile Group Two $250,000 (T) 1,600m​​​​​​​
8.50pm: Meydan Sprint Group Two $250,000 (T) 1,000m​​​​​​​
9.25pm: Handicap $135,000 (D) 1,400m
10pm: Handicap $135,000 (T) 1,600m

More on animal trafficking
While you're here
ENGLAND SQUAD

Team: 15 Mike Brown, 14 Anthony Watson, 13 Ben Te'o, 12 Owen Farrell, 11 Jonny May, 10 George Ford, 9 Ben Youngs, 1 Mako Vunipola, 2 Dylan Hartley, 3 Dan Cole, 4 Joe Launchbury, 5 Maro Itoje, 6 Courtney Lawes, 7 Chris Robshaw, 8 Sam Simmonds

Replacements 16 Jamie George, 17 Alec Hepburn, 18 Harry Williams, 19 George Kruis, 20 Sam Underhill, 21 Danny Care, 22 Jonathan Joseph, 23 Jack Nowell

While you're here
KEY DEVELOPMENTS IN MARITIME DISPUTE

2000: Israel withdraws from Lebanon after nearly 30 years without an officially demarcated border. The UN establishes the Blue Line to act as the frontier.

2007: Lebanon and Cyprus define their respective exclusive economic zones to facilitate oil and gas exploration. Israel uses this to define its EEZ with Cyprus

2011: Lebanon disputes Israeli-proposed line and submits documents to UN showing different EEZ. Cyprus offers to mediate without much progress.

2018: Lebanon signs first offshore oil and gas licencing deal with consortium of France’s Total, Italy’s Eni and Russia’s Novatek.

2018-2019: US seeks to mediate between Israel and Lebanon to prevent clashes over oil and gas resources.

COMPANY PROFILE

Name: Rain Management

Year started: 2017

Based: Bahrain

Employees: 100-120

Amount raised: $2.5m from BitMex Ventures and Blockwater. Another $6m raised from MEVP, Coinbase, Vision Ventures, CMT, Jimco and DIFC Fintech Fund

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Emergency phone numbers in the UAE

Estijaba – 8001717 –  number to call to request coronavirus testing

Ministry of Health and Prevention – 80011111

Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre

Emirates airline – 600555555

Etihad Airways – 600555666

Ambulance – 998

Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries

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Milestones on the road to union

1970

October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar. 

December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.

1971

March 1:  Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.

July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.

July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.

August 6:  The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.

August 15: Bahrain becomes independent.

September 3: Qatar becomes independent.

November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.

November 29:  At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.

November 30: Despite  a power sharing agreement, Tehran takes full control of Abu Musa. 

November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties

December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.

December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.

December 9: UAE joins the United Nations.

Updated: April 07, 2022, 8:46 AM
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