Shell Expects Up to $5 Billion Hit From Russia Exit

Shell PLC, the oil industry company expects to book accounting charges of up to $5 billion in the first quarter related to its decision to exit its Russia operations, including a joint venture with energy giant Gazprom PJSC in the wake of Russia’s invasion of Ukraine.

Shell also announced in February that it would end its involvement in financing the Nord Stream 2 natural gas pipeline project. It also said it would exit its 27.5% stake in a major offshore gas project in Russia’s Far East that is 50% owned by Gazprom.

Shell's estimated rates ranged from $ 4 billion to $ 5 billion on Thursday, including other estimated fallouts due to the abandonment of the Russian business. These include possible unpaid contracts and other credit losses. Its share went down1.9% in early trading in London.

The company said that it expects to report strong first-quarter earnings in its large qualified natural gas business along with an increase in earnings from oil and gas trading. 

Shell's first-quarter results next month highlight its profits from the renewable energy business for the first time. The renewable energy business will no longer be part of the integrated gas business segment. The changes in the reporting segment reflect the growing focus of investors and businesses on low-carbon energy throughout the industry.