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Shell Abandons Its Russian Oil Operations Out Of Remorse

Shell Abandons Its Russian Oil Operations Out Of Remorse

Image Source: ANI News

Shell announced on Tuesday that it would cease purchasing Russian crude and that it would phase out its involvement in all Russian hydrocarbons, ranging from oil to natural gas, through Ukraine, becoming one of the first major Western oil companies to abandon Russia completely.

Oil prices jumped over $139 a barrel on Monday, reaching their highest level since July 2008, as the United States and its European allies considered imposing an embargo on Russian oil imports in response to Moscow’s invasion of Ukrainian territory. [O/R]
Oil major Shell has also issued an apology for purchasing Russian crude last week after announcing that it would be withdrawing from its Russian projects, including the Sakhalin 2 LNG facility. It has a 27.5 percent share and is controlled by Gazprom.

“We are painfully aware that our choice last week to acquire a shipment of Russian crude oil… was not the best option, and we sincerely regret this,” Ben van Beurden, the company’s chief executive officer, stated.

According to market sources, Shell purchased a shipment of Russian crude oil from Swiss broker Trafigura on Friday for a record low of dated Brent minus $28.50 a barrel. Last month, BP, a British competitor, announced that it was selling its 19.75 percent investment in Russian oil major Rosneft.

Shell said it will modify its crude oil supply chain to withdraw volumes from Russia “as quickly as feasible.” The company also announced it would close its service stations in Russia and its aviation fuels and lubricants activities in Russia. This might take several weeks, according to the business, and could result in lower production from certain of its refineries. At the same time, its withdrawal from Russian petroleum products, pipeline gas, and liquefied natural gas (LNG) will be phased in over several months.

In addition, the corporation intends to discontinue its role in the Nord Stream 2 Baltic gas pipeline between Russia and Germany, which it assisted in financing as a member of a consortium of investors.

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