Company will immediately stop buying Russian crude oil on spot market and will not renew term contracts, according to CEO
Shell is set to withdraw from its involvement in all Russian hydrocarbons, including crude oil, petroleum products, gas and liquefied natural gas (LNG) in a phased manner, aligned with new government guidance, the company announced on Tuesday.
As an immediate first step, the company will stop all spot purchases of Russian crude oil, it said, adding that it will also shut its service stations, aviation fuels and lubricants operations in Russia.
“We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel despite being made with the security of supplies at the forefront of our thinking was not the right one and we are sorry,” Shell Chief Executive Officer, Ben van Beurden, was quoted as saying.
Van Beurden stressed that Shell’s actions to date have been guided by continuous discussions with governments about “the need to disentangle society from Russian energy flows while maintaining energy supplies.”
“Following government statements this week, I want to set out our position clearly,” he noted.
Unless directed by governments, Shell will immediately stop buying Russian crude oil on the spot market and will not renew term contracts, he said.
At the same time, in close consultation with governments, Shell will change its crude oil supply chain to remove Russian volumes.
“We will do this as fast as possible, but the physical location and availability of alternatives mean this could take weeks to complete and will lead to reduced throughput at some of our refineries,” he explained.
The company is also to shut service stations, aviation fuels and lubricants operations in Russia and start phased withdrawal from Russian petroleum products, pipeline gas and LNG.
“This is a complex challenge. Changing this part of the energy system will require concerted action by governments, energy suppliers and customers, and a transition to other energy supplies will take much longer,” the CEO said.