Shell to take $4-5bn hit from Russian exit
Shell warned on April 7 it expected to book an impairment of between $4 and $5bn on its Russian assets in the first quarter of this year, after deciding to withdraw from the country following the outbreak of Russia's war in Ukraine.
Following on the heels of BP, Shell announced on February 28 it intended to withdraw from oil and gas projects in Russia. The company has a 27.5% stake in the Gazprom-operated Sakhalin LNG plant in the Russian Far East and also has shares in Gazprom Neft's Salym Petroleum and Gydan oil developments in west Siberia.
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Shell previously said it would only write off $3.4bn relating to its exit from Russia. The company's overall market capitalisation is currently around $205bn.
In its note, the company also gave a preliminary estimate for first-quarter production at its integrated segment of between 860,000 and 910,000 barrels of oil equivalent/day, down from 927,000 boe/d in the fourth quarter of 2021. Shell cited maintenance activities as a factor behind the decline, including a planned turnaround at Pearl GTL in Qatar.
The company estimates it produced between 7.7 and 8.3mn metric tons of LNG during the three-month period, compared with 7.94mn mt in Q4 2021.
Shell's upstream production figure is expected to range between 1.9 and 2.05mn boe/d, down from 2.16mn boe/d in the previous quarter. The company reduced supply at this segment by 50,000 boe/d as a result of transferring its Canada Shales assets to its integrated gas business.