World

Shell may lose up to $5Bn in Q1 2022 for pulling out of Russia

Shell may lose up to $5Bn in Q1 2022 for pulling out of Russia
British oil and gas company, Shell has recently said that the decision of exiting Russia will cost the company around $5 billion in the first quarter of the year.

The O&G giant said that curbing its operations in Russia would result in reducing its earnings from $4 billion to $5 billion.

Shell has exited the Russian market owing to the latter’s invasion of Ukraine. The energy giant has stated that the loss occurred is due to contracts in the Russian market, credit losses, and Russian assets losing value.

Last month, Shell decided to pull out of its joint venture with Gazprom – Russian energy firm – as it was devastated by the invasion. In addition to this, the British giant has also decided to halt any business with Russian hydrocarbons.

Western governments have constantly been asking their energy companies to cut down their financial ties with Russia since they are exposed to the Russian market.

Oil and natural gas exports are said to be the most important source of economy for the Russian government and its military. Apart from this, the UK and other countries executing sanctions against Russia are expecting that such withdrawal from the Russian market would force Russias President Vladimir Putin to break his invasion of Ukraine.

Shell took the decision amid the stand of the UK government on imposing sanctions on Russian companies.

Furthermore, the company said that has decided to stop all its Russian transactions, irrespective of their financial consequences, adding that it is one of the largest traders dealing with liquified natural gas around the world.

Following the announcements of revenue projections, Shells shares were recorded in the green zone, with a surge of 0.71% when this news was being issued.

Source Credit - https://economictimes.indiatimes.com/news/international/us/energy-giant-shell-loses-5-billion-for-leaving-the-russian-market/articleshow/90711759.cms

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