Shell confirms up to £3.8bn hit from quitting Russia after invasion

Oil giant Shell has confirmed it will take a hit of between £3.1bn and £3.8bn from offloading its Russian assets as the company pulls back from the country.

Bosses said they 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 its invasion of Ukraine.

The company 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”.

Last month Shell’s boss was forced to apologise after buying oil on the spot market from Russia at knock-down prices.

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

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

It 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.

Updating the stock market on its expected results for the first three months of the year, Shell added it will see a pre-tax depreciation £920m to £1.1bn in its integrated gas division.

There is also expected to be a depreciation in its upstream business of £2.1bn to £2.4bn, £530m to £690m for oil products and £190m to £230m for its chemicals division.