Apr 7, 2022
Shell expects up to $5bn hit from Russia exit
Shell will take a writedown of up to $5bn after its decision to quit Russia as the UK-listed energy group warned extreme price volatility in commodity markets would hit cash flow. Shell was one of many companies to withdraw from Russia after the invasion of Ukraine on February 24, as western groups reassessed their ties with Moscow and in some cases tore up business relationships that had been decades in the making. Owing to the "Unprecedented volatility in commodity prices prevailing up until the end of the [first] quarter" Shell said it expected $7bn of cash outflow from operations. Big energy traders such as Shell and independent rivals like Vitol and Trafigura have been hit with huge demands for cash to backstop the futures contracts they use to hedge deals to buy and sell commodities. Separately, van Beurden said Shell would work with the UK government on its new energy strategy, which includes a pledge to increase offshore wind capacity to 50 gigawatts by 2030, up from slightly more than 10GW at present.
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