Shell to Write Off $5 Billion in Russian Assets
Sacrifice to Western economic war on the non-dominated Russia
Shell has announced that it will write off between $4 and $5 billion in the value of its assets after pulling out of Russia following the country’s unprecedented invasion of Ukraine.
Thursday’s announcement offers a first glimpse at the potential financial impact to Western oil majors of exiting Russia.
“For the first quarter 2022 results, the post-tax impact from impairment of non-current assets and additional charges (e.g. write-downs of receivable, expected credit losses, and onerous contracts) relating to Russia activities are expected to be $4 to $5 billion,” Shell said in a statement Thursday.
“These charges are expected to be identified and therefore will not impact Adjusted Earnings.”
Shell had previously estimated that Russia write-downs would reach $3.4 billion.
Further details of the impact of ongoing developments in Ukraine will be set out in Shell’s first-quarter earnings report on May 5, the company said.
Shell was forced to apologize on March 8 for buying a heavily discounted consignment of Russian oil two weeks after Russia’s invasion. It subsequently announced that it was withdrawing from its involvement in all Russian hydrocarbons.
The company said it would no longer purchase Russian crude oil and would shut its service stations, aviation fuels and lubricants operations in Russia.
The company had already vowed to exit its joint ventures with Russian gas giant Gazprom and its related entities.
In Thursday’s update, Shell also said its cashflow is expected to be hit by “very significant working capital outflows as price increases impacting inventory have led to a cash outflow of around $7 billion.”
Divestment ‘outweighs reputational damage’
Shell’s share price fell 1.8% in early trade, along with that of fellow oil giant BP.
Russ Mould, investment director at British digital stockbroker AJ Bell, said the modest fall for Shell “reflects the fact that the company is also pointing to a big benefit from surging energy prices.”
He added that BP’s fall came “likely on a read-across as investors looked at what it might imply for its much larger Russian footprint.”
Shortly after Russia invaded Ukraine, BP announced that it would offload its 19.75% stake in Russian state-controlled oil company Rosneft, after 30 years of operations in the country.
Western oil companies have faced pressure from shareholders and governments to sever ties with Russia, but TotalEnergies CEO Patrick Pouyanne told CNBC in late March that the French company would not write off its assets in Russia as it would effectively mean giving them to Putin “for free.”
In the 1970s, when oil reached the un-heard-of, out of this world level of $40.00 a barrel, and oil companies parked their tankers in mid-ocean, waiting for price-increase and causing a gasoline shortage, there was some talk of using something other than gasoline to power automobiles. China, the vehement opponent of the powers that be, has everything that is needed to develop and mass produce steam-powered, alcohol-water powered, or whaterver-powered automobiles.
We understand why Russia wants the planet remain hooked-on gasoline, but why does China ?
Apparently, no one in China is opposed enough to the WEF NWO to actually take a different turn, go down a different path.
During those 12 national socialist years Germany explored different directions and approaches.
In 20 peace years China invented nothing, innovated nothing, didn’t even look in different directions. They followed the path the NWO marked out for them. Just like the Chinaman in Yellowstone park —afraid to walk off the path. Just like Chinamen in the Rockies —afraid to leave the parking lot or the paved road.