Shell

Royal Dutch Shell was founded in 1907.

Performance indicators

2022

Loss of almost $0.5 billion due to the sale of Russian assets to Lukoil

At the end of July 2022, Shell spoke about major losses from the sale of Russian business. Thus, the company's net expenses from the sale of the gas station network and the lubricant plant to Lukoil amounted to $83 million. Another $343 million fell on a loss from the difference in exchange rates.

The deal to sell gas stations to Lukoil was closed in May 2022. After that, the Russian company began to own gas stations located mainly in the Central and North-Western federal districts. Lukoil also acquired from Shell a plant for the production of lubricants in Torzhok, Tver Region.

Shell lost $0.5 billion on the sale of Russian assets

The founder of Engineering & Consulting PFA Alexander Gadetsky, Alexander Gadetsky, in a conversation with Kommersant, suggested that the deal was held with a discount of up to 50%. The cost of the plant in Torzhok "was hardly high, since there is not a full production cycle, but the blending of semi-finished products," he added.

Shell indicated that by the end of 2022 it will completely stop long-term purchases of oil from Russia from third parties. However, this does not apply to two contracts with a small independent manufacturer, which the company did not name. In addition, the company said it was still working on an agreement to withdraw from the Sakhalin-2 liquefied natural gas project, in which it owns 27.5% minus one share.

At the end of June 2022, Russian President Vladimir Putin signed a decree according to which all the rights and obligations of the operator of the Sakhalin Energy Investment Company Ltd project will be transferred to the company created by the government, and the property will be owned by the state.

In its report for the first quarter of 2022, Shell recorded write-offs related to Shell Oil in the amount of about $600 million - the amount includes non-current assets in the amount of $358 million and other expenses. In general, Shell has already written off the entire book value of assets in Russia - about $4 billion.^[1]

Loss of $5 billion due to withdrawal from Russia

Shell estimated its losses from leaving the Russian market at $4-5 billion in the first quarter of 2022. The oil and gas giant announced this in early April 2022.

Shell included in these losses a decrease in the value of non-current assets and additional expenses (write-off of receivables, expected losses on loans and burdensome contracts) related to operations in Russia. The company stressed that this will not affect adjusted profits.

Shell: We lost $5 billion due to withdrawal from Russia

The company has warned shareholders about the impact of unprecedented volatility in energy markets on its financial result, but it will be rather positive in trading.

This amount exceeds the value of Shell's assets in venture capital and processing enterprises in Russia, which are estimated at $3.4 billion, notes. Bloomberg But it is much less than the losses of $25 billion that it can incur, which the BritishBP had closer ties with. Russia

On February 28, 2022, Shell announced a decision to sell shares in joint ventures with Gazprom, including 27.5% of the first Russian Sakhalin-2 LNG plant and 50% in two joint ventures with Gazprom Neft: Salym Petroleum Development and Gydan Energy. The company refused to participate in the Nord Stream-2 project.

On March 8, 2022, Shell announced that it would refuse to purchase Russian oil and participate in projects in Russia. The company also said it would close all gas stations in the country.

According to Bloomberg, Shell will probably not be able to pay for Russian gas this month in March 2022. This is due to the fact that the United Kingdom, unlike the European Union, imposed sanctions against Gazprombank, as well as with the decree of President RFVladimir Putin on the transfer of gas contracts to rubles.^[2]

The rise of profits against the background of the conflict in Ukraine

Oil majors are making record profits as the world suffers from high fuel prices. In the second quarter of 2022, Big Oil may receive a record profit of $50 billion.

ExxonMobil,, Shell, and Chevron will make TotalEnergies BP even more money than in 2008, when world oil prices jumped to $147 dollars a barrel.

2021: Tenth in the world in terms of net revenue - $262 billion

The largest companies in the world in terms of net revenue in 2021
"'Net revenue"' (net revenue) - revenue for added value.
This revenue includes revenue costs such as discounts, returns, etc.
Net Revenue Formula = Gross Revenue - Directly Related Selling Expenses.

History

2022

Loss of stake in Salym Petroleum

In July 2022, Shell announced the loss of control over the joint venture with Gazprom Neft Salym Petroleum and the resignation of directors from Shell in the joint venture. The changes occurred after the sanctions imposed by the United States and its satellite countries, after the start of Russia's special operation in Ukraine.

Loss of share in Gydan Energy Gazprom Neft

As it became known on May 23, 2022, Shell sold its stake in their joint venture (JV) to Gazprom Neft. We are talking about the company "Gydan Energy," which was engaged in the research and development of Leskinsky and Pukhutsyakhsky license areas on the Gydan Peninsula. The financial and other parameters of the transaction are not specified. Read more here.

2021

Plans to leave the Netherlands and ditch the Royal Dutch words in the title

In November 2021, Royal Dutch Shell Plc announced a major overhaul of its legal and tax structure that will see the company leave the Netherlands amid deteriorating relations with the country, which has been its birthplace for a century.

On November 15, Shell said it planned to liquidate the existing dual share structure, remove "Royal Dutch" from its name, move its tax residence to Britain and move its top executives from The Hague to London.

The Dutch government immediately said it was "unpleasantly surprised" by the announcement.

Funding from the British government to install charging stations for electric vehicles

Royal Dutch Shell Plc aims to expand the network of charging stations for electric vehicles in the UK - in August 2021 it became known that Shell's Ubitricity division will install 50,000 street charging stations by 2025. The UK government will fund 75% of installation costs.

Shell Data Breach Due to Accellion Software Flaw

At the end of March 2021, a flaw in the Accessory software led to a leak of Shell data. The oil and gas giant said the incident involved an Accommodation solution used to securely transfer large data files. Hackers gained access to some personal data of employees, as well as data from Shell companies and some of its customers.

At the same time, Shell noted that experts did not identify the impact of viruses on the main information technology systems, since the affected service was isolated from the rest of the company's infrastructure. Upon learning of the incident, Shell launched an investigation and made contact with all affected individuals to address possible risks. Shell also informed the relevant regulatory and law enforcement agencies. Who exactly is behind the data leak is not specified. According to Bleeping Computer, the company was previously attacked by groups of Clop and FIN11 hackers. So far, data stolen from Shell has not been released.

Vulnerability in Accessory software leads to Shell data breach

Previous victims who used a vulnerable version of the Accessory FTA server include Bombardier, the Washington state auditor's office and Qualys. In the Qualys case, the Clop ransomware gang posted screenshots of files believed to belong to the company on its own website.

As you can see, when it comes to protecting data and ensuring customer privacy, not all organizations are ready to bear full responsibility, "said Purandar Das, CEO and co-founder of data security company Sotero. - Most organizations focus on protecting their internal networks and assume that the host or software/service provider is responsible for the exchange or transfer of data. This is the wrong approach.[3]

Cooperation with Gazprom, including in the field of digitalization

On March 16, 2021, Gazprom and Shell entered into a strategic cooperation agreement. The five-year partnership, among other things, involves the joint development of IT projects in the oil and gas sector. Read more here.

2020

Net loss - $21.68 billion, revenue - $183.2 billion

In 2020, Shell received revenue of $183.2 billion, which is almost half the figure a year ago, equal to $352.11 billion.

In the list of the largest oil and gas companies in the world

At the end of 2020, the company registered a net loss, which reached $21.68 billion, while in 2019 it had a net profit of $15.84 billion. The net debt of the European oil and gas giant by the end of 2020 reached $75.4 billion, which is 4.7% less than a year earlier.

Shell's loss, taking into account changes in production costs (CCS) attributable to shareholders, at the end of 2020 turned out to be $19.9 billion. The financial statements note that the decline in indicators was due to low oil and LNG prices and a decrease in refining margins.

Shell ended 2020 with a loss of $21.68 billion

Shell, like other oil and gas companies, suffered from lower energy demand in 2020 amid the COVID-19 coronavirus pandemic and lower oil prices. At some points, the price of oil fell to $20 per barrel, later prices rose to $56, while remaining significantly below the 2019 high of $75.

Shell said that by the end of 2020, there was significant uncertainty in macroeconomic conditions due to the COVID-19 pandemic, which, as expected in the company, will continue to negatively affect the level of demand for oil, gas and related products.

Shell's loss in the field of geological exploration and production (upstream) in 2020 amounted to $10.79 billion against a profit of $3.86 a year earlier. Production was 3.386 million barrels of oil equivalent per day, a year-on-year decline of 8%.

In the refining and sales segment, adjusted quarterly profit decreased by 7% in 2020, to $1.43 billion. The volume of sales of petroleum products amounted to 4.71 million barrels per day, which is 28% lower than a year ago^[4]

Shell cuts 9,000 jobs due to coronavirus

At the end of September 2020, it became known about Shell's decision to cut from 7 to 9 thousand jobs in order to optimize costs. The oil and gas giant is forced to lay off employees due to the COVID-19 coronavirus pandemic.

The company noted that the layoffs will take place until the end of 2022. In particular, 1.5 thousand people will leave Shell, who are ready to leave of their own free will in 2020. It is assumed that such measures will save Shell from $2 billion to $2.5 billion by 2022.

Shell cuts 9,000 jobs due to COVID-19

We need to be a simpler, more streamlined and more competitive organization, "Ben van Beurden, the company's CEO, said in a statement. So, he drew attention to the too wide gap between him, as CEO, and operators, technical specialists in the company.

Due to the fall in oil prices due to the COVID-19 coronavirus pandemic, Shell's competitors have also taken decisive steps to strengthen their businesses. BP said in June that it plans to cut 10,000 jobs, Chevron intends to cut 10% to 15% of its global workforce, while Exxon Mobil is reviewing its country-specific workforce.

In our view, the move to a more cost-effective, low-carbon organization is the right solution for Shell in the long Barclays run, analysts including Lydia Rainfort noted. "But with the macro environment still challenging, it could take some time to reflect on the stock price.

These additional details should help investors who think Shell has been sitting idly by in recent months, said RBC Capital analyst Biraj Borhataria. He also stressed that investors will want to receive more detailed information about the company's plans, but they will be known in early February 2021.[5]

2019: Among the world's most profitable companies

The 20 most profitable companies in the world. Earnings per day, 2019

2019

2017

Plans for coffee grounds biofuels

In November 2017, Shell announced plans to start producing coffee cake-based biofuels. The new development has already begun to be tested in London.

Shell is going to launch a massive release of pure biodiesel from coffee waste in conjunction with British companies Bio-Bean and Argent Energy.

London bus using fuel from coffee waste

Bio-Bean processes coffee grounds industrially and sells its products to British companies that use them to heat buildings and as an environmental fuel for cars.

In November 2017, passenger buses running on the roads of the British capital began using such fuel, but mixed with conventional diesel in a ratio of 20% to 80%. It is not specified when it is planned to transfer London buses to coffee refueling.

This is an excellent example of what we can do if we treat waste as an unused resource, "said Arthur Kay, founder of Bio-Bean.

According to Bio-Bean estimates, the annual volume of coffee waste in London reaches 200 thousand tons, with each ton of such a substance reducing carbon dioxide emissions by 6.8 tons. Bio-Bean calculated that to refuel one bus with biodiesel from coffee waste for one year, Londoners need to drink about 2.55 million cups of coffee. By November 2017, Bio-Bean made 6 thousand liters of coffee oil from waste.

London's public transport manager Transport for London (TfL) has long tried to use biofuels to reduce the environmental impact in the metropolis. In 2015, some buses began refuelling with fuel made from animal fat and spent frying oil, and in July 2017 , Scotland tested a biofuel machine for the first time using whisky waste.^[6]

Shell buys NewMotion

In October 2017, oil and gas giant Royal Dutch Shell announced the purchase of NewMotion. This deal was the first acquisition of the Dutch-British corporation in the technology market for electric vehicles in the face of growing demand for environmentally friendly cars, reports Reuters news agency. Read more here.

1931

Passenger aircraft refueling. Palestine, October 1931.

Notes