Ukraine: Shell announces its intention to “withdraw from Russian oil and gas”

The company aligns itself with the economic sanctions regime issued by the British government against Russia.

British oil giant Shell on Tuesday announced its intention to withdraw from Russian oil and gas.gradually, to align with new government directivesBritish, in reaction to the Russian invasion of Ukraine.

In a statement, Shell clarified that, “as an immediate first step, the group will stop all spot purchases on the Russian crude oil market” and “close its service stations, as well as its aviation fuel and lubricants activities in Russia“.

Our actions to date have been guided by ongoing discussions with governments about the need to detach society from Russian energy flows, while maintaining energy supplycommented Shell Chief Executive Ben van Beurden.

He warns, however, that in view of “physical location and availability of alternatives“, this “complex challenge» «could take weeks“.

These societal changes highlight the dilemma of putting pressure on the Russian government for its atrocities in Ukraine and ensuring a stable and secure supply of energy across Europe.“, continues Ben van Beurden.

“The right thing to do”

Despite a series of massive and unprecedented sanctions against Moscow, the energy sector has so far been spared, in particular because Europe is very dependent on Russian gas, Germany in particular. On Monday at a press conference, British Prime Minister Boris Johnson said in particular that getting out of Russian oil and gas was “the right thing to do“but had to be done”step by step“.

We have to make sure we have substitute supplies. One of the things we are looking at is the possibility of using more of our own hydrocarbonsadded Boris Johnson. Dutch Prime Minister Mark Rutte had however argued at the same press conference that the transformation of the energy sector “would take time“.

The sad reality is that we are very dependent on Russian gas and oil“and that cut off this supply without alternatives”would generate unmanageable risksfor European economies, he judged. French Economy Minister Bruno Le Maire said on Tuesday that Europe has “solutions to become independent of Russian gas“, adding to wish the”accelerate“to be able to”take up the challenge of winter 2022-2023“.

The United States, less dependent on Russian hydrocarbons, are pressuring their European partners to launch sanctions against the energy sector that would hit Russia’s revenues to the core, hoping to make Moscow bend and encourage it to cease its offensive in Ukraine. Since the start of the Russian invasion of Ukraine, the prospect that Western countries will no longer have access to Russian hydrocarbons has inflamed energy markets, pushing the price of European natural gas to record highs while crude oil prices are approaching their historic highs.

Reputation before profits

Susannah Streeter, analyst at Hargreaves Lansdown, notes that in its press release, Shell regrets having bought a shipment of Russian oil at a discounted price a few days ago, when many distributors or brokers had already turned away from Russian crude by fears of potential sanctions.

This shows how the tide has turned in the business worldremarks Susannah Streeter, adding that Shell now putsits reputation before its immediate profits“. The market welcomed the group’s decision and Shell shares took 1.03% to 2,001.50 pence around 2:00 p.m. GMT.

Susannah Streeter also notes that European governments “seem determined to further support the energy transition“, in order not only to fight against global warming but also to favor locally produced energies.

Shell should be well positioned to take advantage of this“even if he is”set to remain an oil and gas giant for decades to come“, she adds. At the end of February, Shell’s British rival, BP, announced its withdrawal from the Russian giant Rosneft, of which it held 19.75%.

At the very beginning of March, the Italian Eni had indicated that it intended to sell its 50% share in the Blue Stream gas pipeline, controlled equally with Gazprom. The CEO of TotalEnergies Patrick Pouyanné for his part declared on Monday that he had no pressure from the “highest authoritiesto leave Russia.


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