Shell last week apologized for buying Russian oil and said it would begin cutting off all involvement in the country’s oil and gas, including the closure of its 500 petrol stations there.
The London-listed power giant sparked an international backlash on Friday by buying a heavy discount cargo of Russian oil just days after it condemned Russia’s aggression in Ukraine and promised to pull out of a joint venture with Kremlin-backed Gazprom.
Ukrainian Foreign Minister Dmitry Kuleba tweeted: “Doesn’t smell Russian oil? [like] Ukrainian blood for you? “
Ben Van Bourdain, chief executive of Shell, said: “We are acutely aware of our decision last week to purchase a cargo of Russian crude oil for refining in products such as petrol and diesel – albeit with security concerns in mind.” Thoughts – not right and we’re sorry. “
She said that to date, Shell’s activities have been guided by “continuous discussions with the government about the need to isolate society from the flow of Russian energy while maintaining the supply of energy.”
Van Boureden set out a series of pledges to remove the shale from all Russian oil and gas involvement, which he said the shale would now follow if the government did not order otherwise.
He said Shell would immediately stop buying Russian crude oil on the spot market and would not renew the contract. It will change its “crude oil supply chain to remove Russian volumes” as soon as possible, but says “physical location and availability of alternatives means it could take weeks to complete and reduce throughput at some of our refineries.”
Shell says it operates about 500 service stations in Russia and also has an aircraft fuel and lubricant business. Van Beurden said all of this would be stopped, although the timing was unclear. It will “carefully consider the safest way to do this, but the process will start immediately”.
It will begin “phased withdrawal from Russian petroleum products, pipeline gas and LNG” but warns that it will take longer. It was revealed on Saturday that Shell had unloaded a cargo of Russian LNG at a terminal in Wales.
The announcement of a full withdrawal from Russia marked a significant increase in Shell’s position last week, when it promised to withdraw from a joint venture with the Kremlin-backed gas company Gazprom. This includes a 26.5 percent stake in Russia’s Far Eastern Giant Sakhalin-2 liquefied natural gas project.
At the time, Van Boureden said that Shell was “shocked by the loss of life in Ukraine, which we are sorry for, a senseless act of military aggression that threatens European security.” He added: “We can’t – and we can’t – stand by.”
Although there is no formal ban on Russian oil and gas, buyers began avoiding Russian oil cargo last week, with Russian oil being released on record to Brent crude.
On Friday, however, Shell bought a cargo of Russian crude oil from Swiss trader Trafigura at a discount of 28 28.50 per barrel.
Shell initially defended the purchase, saying it had “a relative lack of alternatives” to supply refineries and chemical plants “to ensure that we continue to produce the necessary fuels and products that people and businesses depend on every day.” .
As Saturday’s response escalated, it promised to donate any money to a fund to help the people of Ukraine, but again defended the decision, stressing that “cargoes from alternative sources did not arrive on time to avoid disruption of market supplies.”