Shell delivered good news just recently. The company reported a record first-quarter profit of $9.13bn. All thanks to oil and gas prices, stellar refining profit and good trading performance boosting the profit. Shell struggles with Russia’s invasion of Ukraine impacting energy volatility by joining with BP and TotalEnergies. These sectors are rivals to Shell.
Even after writing down $3.9bn post tax as a result of moving away from Russia operations, the company beats its highest in the first-quarter and quarterly profit. It also winds down oil and gas trading with Russia. Shell’s shares increased 3.3% in early trading. It outperforms the 18% rise of energy company index.
Shell reported that by the end of this year, the company would make clearance about long-term Russian crude oil purchases. The company would only continue with small independent Russian producers. However, they refuse to name the producers. The contract on refined oil products imports would stop. So far, they still have ongoing contracts buying Russian liquefied natural gas.
It is not to question that Shell is the world’s biggest LNG trader. Their sales of fuel rose by 9% to 18.3m tonnes. In other words, LNG is a stepping stone where Europe completely ends Russian pipeline gas dependence. On Wednesday, The European Union chief executive proposed a phased oil embargo on Russia. It would mark the largest trading bloc on Russia fuel. Although, it hasn’t been implemented yet.
From Shell only, Russia could gain as much as $1bn in the country’s balance sheet asset. It covers petrol stations, a lubricants plant, and future dividends. All is from its stake in Sakhalin-2-LNG project. The spike of revenue helped Shell to cut its $48.5bn debt burden by the end of 2021.
