Shell reverses write-offs thanks to high energy prices

Shell will reverse write-offs totalling up to $4.5 billion thanks to elevated gas and oil prices, the British energy giant announced Thursday.

It expects to reverse impairments of between $3.5 billion and $4.5 billion, the company said in a statement.

Shell revised its outlooks for energy prices, as well as supply and demand.

“This resulted in a review of” impaired Shell gas assets, the oil company said.

Shell in 2020 booked a charge of $22 billion as oil prices collapsed in the wake of Covid lockdowns that crushed demand for energy worldwide.

The group has also taken a hit totalling $3.9 billion on its exit from Russia after the country’s invasion of Ukraine.

Oil and gas prices have surged this year owing to the Ukraine war and after countries lifted Covid lockdowns.

Crude futures have fallen back sharply this week, however, on expectations of weaker demand should major economies slide into recession as inflation soars.

By Thursday, world oil prices traded around $100 per barrel.

With prices still extremely high historically, the UK government has proposed a temporary windfall tax on Shell and its British rivals, including BP.

Proceeds will help to fund a multi-billion-pound support package for consumers hit by surging energy bills.

Shell’s statement comes ahead of full second-quarter earnings on July 28.

Its share price rallied 3.3 percent to £20.38 ($24.31) in late morning deals on London’s rising stock market.

Agence France-Presse