Shell apologizes for buying Russian oil Business

Shell will stop buying Russian oil and gas and apologized for its decision to buy energy from the Kremlin at a discount last week.

Energy giant FTSE 100 said it would immediately halt spot purchases of Russian crude oil and begin a phased withdrawal from all other types of energy, including petroleum products and liquefied natural gas.

It will also close its gas stations, aviation fuel and lubricants business in Russia.

Shell was widely criticized last week after buying a heavily discounted shipment of Russian oil, even as many traders shunned energy from Moscow in response to Ukraine’s invasion.

The company apologized for the move and said it would commit all profits from the remaining Russian oil it holds to a dedicated fund to support Ukraine.

Ben van Beurden, Shell’s chief executive, said: “We are fully aware that our decision last week to buy a shipment of Russian crude oil to be refined into products like petrol and diesel – although it was taken with security of supply at the forefront of our thinking – was not the right one and we are sorry for that.

Rival BP said it would continue to buy Russian oil under existing contracts, but would not enter into any new oil or gas contracts.

Both Shell and BP have announced their intention to withdraw from Russia following the invasion of Ukraine.

Shell has pledged to end its tie-up with Russian state-owned Gazprom by selling its 27.5% stake in the Sakhalin 2 liquefied natural gas plant and halting work on the Nord Stream 2 pipeline, which was interrupted by Germany earlier this month.

BP said it would sell its 20% stake in Kremlin-controlled oil giant Rosneft, warning it could take a $25 billion hit from the move.

However, Shell drew heavy criticism last week when it broke ranks with Western traders to go bargain-hunting for Russian oil, grabbing a shipment for $28.50 a barrel from less than the reference price of Brent.

Dmytro Kuleba, Ukraine’s foreign minister, lashed out at the company, tweeting: “Doesn’t Russian oil smell of Ukrainian blood to you?

Shell initially defended its decision as “difficult” but necessary before backtracking.

The move comes after oil prices hit their highest level since 2008 this week, as war in Ukraine could upset global supplies.

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This notice was published: 2022-03-08 13:08:54

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