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British energy giant Shell on Thursday said it expects to take a hit of up to $5 billion in the first quarter of 2022 following its decision to leave Russia, one of the first signs of the wider financial fallout of Vladimir Putin’s invasion of Ukraine for the sector as companies around the world cut ties with Moscow.

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Shell said it expects a post-tax impairment of between $4 billion and $5 billion of assets and charges related to credit losses and contracts in Russia in the first quarter of 2022, higher than its previous estimate of $3.4 billion.

The write-down will not impact the company’s earnings, which are set to be announced in early May, Shell said.

Shell shares fell more than 2% in London on Thursday.

Shell is not the only energy company to be impacted: BP faces a hit of up to $25 billion for leaving Russia, the company saidstemming primarily from foreign exchange losses and abandoning its shares in Russian oil giant Rosneft, which accounts for around one third of its oil and gas production.

ExxonMobil is also preparing for losses in Russia, which could be as high as $4 billion for exiting a drilling project.

France’s TotalEnergies has been criticized for not fully exiting Russia and its refusal to write off its assets like some of its rivals, something CEO Patrick Pouyanne defended, argued doing so effectively meant giving them to Putin for “free.”

Credit: www.forbes.com /

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