Shell to put profit made from Russian oil trading into Ukraine aid fund
Oil marketing firm, Royal Dutch Shell, has indicated that it will push profits from any Russian oil it purchases into a fund that will go towards humanitarian aid to Ukraine.
The company on Friday, bought a cargo of Russian crude oil at a record low discount, the first of such trade since Russia invaded Ukraine last week.
The deal, which did not violate Western sanctions on Moscow, was criticized by Ukraine’s Foreign Minister Dmytro Kuleba.
“I am told Shell discreetly bought some Russian oil yesterday. One question to @Shell: doesn’t Russian oil smell (of) Ukrainian blood for you?,” Kuleba wrote in a tweet.
Shell, however, defended the purchase, adding that it would choose alternatives to Russian oil wherever possible, but this could not happen overnight because of how significant Russia is to global supply.
It added: “We didn’t take this decision lightly and we understand the strength of feeling around it.”
The oil firm further noted that it would give any profits from the limited amount of Russian oil it has to purchase to a dedicated fund, and together with aid agencies would determine where those funds would best be used to help alleviate hardship suffered by the people of Ukraine.
Russian exporters have in recent days faced severe problems with credit lines, shipping and insurance, resulting in delays and cancellations to their attempts to find buyers for Russian crude.
Meanwhile, Shell noted that it will exit all its Russian operations, including a major liquefied natural gas plant, it said on Monday, becoming the latest major Western energy company to quit the oil-rich country following Moscow’s invasion of Ukraine.
The decision comes a day after rival BP abandoned its stake in Russian oil giant Rosneft (ROSN.MM) in a move that could cost the British company over $25 billion. Norway’s Equinor (EQNR.OL) also plans to exit Russia.
Shell said in a statement it will quit the flagship Sakhalin 2 LNG plant in which it holds a 27.5% stake, and which is 50% owned and operated by Russian gas giant Gazprom.
Shell said the decision to exit Russian joint ventures will lead to impairments. Shell had around $3 billion in non-current assets in these ventures in Russia at the end of 2021, it said.
“We are shocked by the loss of life in Ukraine, which we deplore, resulting from a senseless act of military aggression which threatens European security,” Shell Chief Executive Ben van Beurden said in a statement.
Rival BP’s Chief Executive Bernard Looney called an urgent meeting with his leadership team on Thursday, just hours after the first Russian bombs fell on Ukrainian capital Kyiv last week, two BP sources told Reuters. Russia calls its actions in Ukraine a “special operation”.
During that previously unreported meeting, Looney made it clear the company’s investment in Rosneft had become untenable, the sources said.
“There was only one decision we could make,” one of the BP insiders said. “The exit was the only viable way.”
