Shell plans exit from electricity sales business in three countries
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Shell will assess the possibility of withdrawing from three electricity retailers in the UK, Germany and the Netherlands, transmits Reuters, citing a company statement.
The report said that European energy suppliers have struggled over the past year with a sharp increase in wholesale prices and efforts by governments to shield consumers from rising bills. Shell said it has begun a strategic review of the three businesses that is likely to take several months.
Shell injected nearly $1.5 billion in cash and loans into its UK energy retail business in 2022 to help it weather huge electricity price volatility that has caused several rival UK utilities to collapse.
Shell Energy Retail, its UK business, has 1.4 million customers, while its German business has 110,000 and its Dutch business has 15,000. Shell has clarified that it is not considering selling its wholesale and power business. (B2B), as well as its energy supply businesses in the US and Australia.
While the retail business is struggling, Shell is set to post a record annual profit of over $30 billion in 2022 on Feb. 7 in its full-year earnings report.
The energy crisis in Western countries is caused by a reduction in Russian energy supplies to Europe, as well as sanctions against the Russian Federation in the energy sector. The EU authorities have repeatedly recognized that Europe is in for a difficult winter of 2022-2023. At the same time, they do not plan to lift the sanctions, explaining the problems that have arisen at the cost of Europe’s independence from Russia and its energy resources.
After the start of Russia’s special operation in Ukraine, Western countries imposed new sanctions on Russian companies, businessmen and the country’s leadership. The states banned the export of some goods and technologies to Russia, and also closed their airspace to Russian aircraft. Some foreign companies have begun to suspend their activities in Russia due to a special operation, sanctions and problems with logistics. EU countries have already introduced nine packages of sanctions.
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