After getting caught with its hands in the cookie jar, it appears that Shell plc (NYSE: SHEL) is undergoing a change of heart. After the company saw significant blowback last week from buying Russian Oil and effectively continuing to fund the nation, Shell this morning announced that it will be reversing course.
The company now intends to end all of its operations related to Russia, which will be shut down in a phased manner. The process will see the firm exit all hydrocarbon subsectors, including petrol products, gas, natural gas, and crude oil. This also includes service stations, aviation fuels, and lubricant operations. The firm also specifically highlighted that it will immediately stop all spot purchases of Russian oil – which appears to hint that the purchases were ongoing until the announcement was made.
The firm is reportedly making the move partially as a result of new government guidance that has been provided. The firm highlighted that unless it is “directed by governments” they will stop purchasing crude oil immediately, while also not renewing such contracts. The firm is reportedly working to change its supply chains, but in the interim expects reduced throughput at certain refineries it operates, with the changes expected to take several weeks.
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In terms of its service stations, lubricants and aviation fuel operations, the company will begin immediately shuttering these operations, but will “consider very carefully the safest way to this.” Petroleum, pipeline operations, and natural gas operations meanwhile are expected to take much longer to transition out of, with it being identified as a “complex challenge.”
The firm was also quick to put its tail between its legs and issue an apology over the purchase of Russian crude oil. “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 security of supplies at the forefront of our thinking – was not the right one and we are sorry,” commented the firms CEO.
The announcement and apology follows heavy blowback that it received related to the purchase.
Information for this briefing was found via Shell and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
