By Joe Hoppe
Shell PLC said Tuesday that it intends to withdraw from Russian oil and gas in a phased manner in response to the Russian invasion of Ukraine, including immediately halting all spot purchases of Russian crude.
The energy major said it will also shut its service stations, aviation fuels and lubricants operations in Russia, and that it won’t renew any Russian term contracts.
At the same time, it will change its crude oil supply chain to remove Russian volumes as quickly as possible, though it cautioned that the physical location and availability of alternatives mean it could take weeks to complete and will lead to reduced throughput at some of its refineries.
Shell said it would start its phased withdrawal from Russian products, but said it was a complex challenge and that changing this part of the energy system would require a concerted action by governments, energy suppliers and customers.
The company also apologized for purchasing 100,000 metric tons of Russia’s Urals crude oil on Friday. It had purchased the oil for $28.50 a barrel less than benchmark crude prices, the Wall Street Journal reported then. It said it would commit profits from Russian oil purchases to humanitarian funds to alleviate the crisis in Ukraine.
Write to Joe Hoppe at joseph.hoppe@wsj.com
By Joe Hoppe
Shell PLC said Tuesday that it intends to withdraw from Russian oil and gas in a phased manner in response to the Russian invasion of Ukraine, including immediately halting all spot market purchases of Russian crude.
The energy major said it will also shut its service stations, aviation fuels and lubricants operations in Russia, beginning immediately, and that it won’t renew any Russian term contracts.
At the same time, it will change its crude oil supply chain to remove Russian volumes as quickly as possible, though it cautioned that the physical location and availability of alternatives mean it could take weeks to complete and will lead to reduced throughput at some of its refineries.
“Our actions to date have been guided by continuous discussions with governments about the need to disentangle society from Russian energy flows, while maintaining energy supplies. Threats today to stop pipeline flows to Europe further illustrate the difficult choices and potential consequences we face as we try to do this,” Chief Executive Ben van Beurden said.
Shell said it would start its phased withdrawal from Russian products, but said it was a complex challenge and that changing this part of the energy system would require a concerted action by governments, energy suppliers and customers.
The company also apologized and acknowledged it was wrong to purchase 100,000 metric tons of Russia’s Urals crude oil on Friday. It had purchased the oil for $28.50 a barrel less than benchmark crude prices, the Wall Street Journal reported then. It said it would commit profits from processing remaining Russian oil to humanitarian funds to alleviate the crisis in Ukraine.
Shell said on Feb. 28 that it would exit its joint ventures with Russian state-controlled energy company Gazprom, and end its involvement in the Nord Stream 2 pipeline project, intended to bring natural gas from Russia directly to Germany.
“These societal challenges highlight the dilemma between putting pressure on the Russian government over its atrocities in Ukraine and ensuring stable, secure energy supplies across Europe,” Mr. van Beurden said.
Write to Joe Hoppe at joseph.hoppe@wsj.com
