Oil giant Shell confirms £3 billion-plus hit from selling Russian assets

Energy major Shell has confirmed that it will take a hit of between $4 billion (£3.1bn) and $5bn from offloading its Russian assets as it pulls back from the heavily sanctioned country.

The group said it will no longer buy oil on the so-called spot market but would continue to fulfil contracts on buying fuel from Russia that had been signed before the crisis in Ukraine.

The firm said: “Shell has not renewed longer-term contracts for Russian oil, and will only do so under explicit government direction, but we are legally obliged to take delivery of crude bought under contracts that were signed before the invasion.”

It added that the state of the global oil markets remains “volatile”.

Officially the company formerly known as Royal Dutch Shell is now just Shell plc. Picture: Anna Gowthorpe/PA

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The update on the cost of no longer doing business in Russia includes Shell quitting joint ventures with Gazprom.

It said previously that it will offload a 27.5 per cent stake in a Russian liquefied natural gas facility, a 50 per cent stake in an oilfield project in Siberia and an energy joint venture.

Shell will also end its involvement in the Nord Stream 2 pipeline between Russia and Germany, which has been put on hold by ministers in Berlin.

In February, the group, which remains a key North Sea player, saw its profits increase nearly fourteen-fold amid soaring oil and gas prices.

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The rises in gas prices, and an 18 per cent spike in the price at which its upstream business sold oil, helped propel it to a $16.3bn pre-tax profit in the fourth quarter of last year, compared with just $1.2bn in the third quarter.

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