Impact of Ukrainian War on Shell's Oil Operations

1 Part 1 Ukranian War Effects on the Oil Industry: Case Study Shell Britain SD Audit Topic Planning Student’s Name Institutional Affiliation Course Date

2 1. Ukranian War Effects on the Oil Industry: Case Study Shell Britain Russia's invasion of Ukraine has had global humanitarian and economic consequences. The energy industry is particularly vulnerable (Pereira et al., 2022) . This study will look at British Energy Shell to see how the conflict has affected the company. Shell, the British energy giant, said it expects to lose up to $5 billion as a result of its decision to leave Russia in the first quarter of 2022, one of the first signs of the sector's wider financial fallout from Vladimir Putin's invasion of Ukraine, as companies around the world cut ties with Moscow (Pestova et al., 2022). The baseline of the audit is the effect of the war on the company and check for the amount of damage it has done. The baseline audit will be how the company has changed product source, the effects of leaving Russia and the effects of the big loss that $5 Billion hit that the company will pertake. The research will use a secondary research methodology which will rely on data from news articles, internent peer reviewed sources and company websites. With the aim of solving the effects of the huge hit at shell, the researcher will commence the project as from 30 th of May 2022. The assessment may take a period of 6 months to complete. Actions will be taken to help shell gain its prominence once more. The research will use benchmark data from Total energies company, this data will be used to compare how the ukranian war has affected these two companies. A sustainability manager would handle such problems faced by shell company as seen here above. This is because they have the knowledge and skills to aid in making informed decisions on sustainable change and development.

3 References Pereira, P., Bašić, F., Bogunovic, I., & Barcelo, D. (2022). Russian-Ukrainian war impacts the total environment. Science of The Total Environment , 155865. Pestova, A., Mamonov, M., & Ongena, S. (2022). The price of war: Macroeconomic effects of the 2022 sanctions on Russia.

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4 Part 2 Ukranian War Effects on the Oil Industry: Case Study Shell Britain Research - Baseline/Bench-marking/Career Student’s Name Institutional Affiliation Course Date

5 Introduction The baseline of the audit is the effect of the war on the company and check for the amount of damage it has done. The baseline audit will be how the company has changed product source, the effects of leaving Russia and the effects of the big loss that $5 Billion hit that the company will pertake Baseline Suppliers Effect Effects of war on Shell company In the first quarter of 2022, Shell exp erienced a post-charge weakness of $4 billion to $5 billion in resources and charges connected to credit disasters and agreements in Russia, up from $3.4 billion previously predicted.. Effects of war on Shell company shares Shell's stock rose 0.71 percent after the announcement of earnings forecasts. In London, Shell's stock fell more than 2%. Baseline C ompany loss Monthly losses Shell lost $100 million in the first quarter and could lose up to $200 million this year as a result of ending new business with Russia and agreeing to sanctions. Baseline on Current Business relationship of Shell and Russia Contracts The company has stated that it will no longer purchase oil, but that contracts signed prior to Ukraine's invasion will be honored. Critisism Shell was criticised for buying Russian crude oil at a low price soon after the conflict started. Other Partners The termination of joint ventures with

6 Gazprom is the cost of Shell's exit from Russia. Response In light of the outrage, the organization apologized and vowed not to buy oil from Russia in the future. Benchmark information Total Energies condemns Russia's military intervention in Ukraine, which has resulted in horrific human consequences and poses a threat to Europe. Complete Energies expresses fortitude to the Ukrainians who are suffering as a result of the results, as well as the Russians who will suffer as a result of the results (San et al., 2020). Total Energies was founded to supply Ukrainian tourists in Europe with fuel and help. Regardless of the impact on its business in Russia, Total Energies supports the scope and seriousness of Europe's consents and will implement them (which is as of now being broke down) ( Johannesson and Clowes, 2022 ) . However, Total Energies has decided not to invest in any new projects in Russia. Regardless of these difficulties, Total Energies had a $18.1 billion net profit. A sustainability manager would handle such problems faced by shell company as seen here above. This is because they have the knowledge and skills to aid in making informed decisions on sustainable change and development. Due to the importance of experience in securing a position as a sustainability manager, applicants with extensive knowledge of logistics, low or zero-carbon technology, or an understanding of building regulations may be able to apply for work directly to an employer, even if they lack the necessary qualifications.

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7 References San-Akca, B., Sever, S. D., & Yilmaz, S. (2020). Does natural gas fuel civil war? Rethinking energy security, international relations, and fossil-fuel conflict. Energy research & social science , 70 , 101690. Johannesson, J., & Clowes, D. (2022). Energy resources and markets– Perspectives on the Russia–Ukraine War. European Review , 30 (1), 4-23.

8 Part 3 Ukranian War Effects on the Oil Industry: Case Study Shell Britain Analysis Student’s Name Institutional Affiliation Course Date

9 Introduction Overview and Research Findings The invasion of Ukraine by Russia has had global humanitarian and economic consequences. The energy industry is particularly vulnerable (Pereira et al., 2022). This research will look into British Energy Shell to see how the conflict has impacted them. Shell, a British energy conglomerate, said it expects to lose up to $5 billion as a result of its decision to leave Russia in the first quarter of 2022, one of the first signs of the sector's wider financial fallout from Vladimir Putin's invasion of Ukraine, as businesses around the world cut ties with Moscow (Pestova et al., 2022). Total Energies strongly condemns Russia's military intervention in Ukraine, which has resulted in atrocities against human rights and poses a threat to Europe. Complete Energies expresses its strength to Ukrainians who are suffering as a result of the outcomes, as well as Russians who will suffer as a result of the outcomes. Total Energies was established in order to provide fuel and assistance to Ukrainian travelers traveling throughout Europe. Total Energies supports the scope and seriousness of Europe's agreements and will put them into effect (which are currently being broken down) regardless of the impact on its business in Russia (Sun et al., 2022). Total Energies, on the other hand, has decided not to invest in any new Russian projects. Total energies as opposed to shell seem to be thriving regrdles of the Ukranian war. Regardles of Shell as well as other companies leaving Russia, Total energies chose to remain despite the uproar and ridicule by the business community ( Felbermayr et al., 2022). However its is clear the, Total energies has distributed its product source in a way that they have other sources apart from Russia- such moves are wise and sustainable to avoid the lack of raw materials in times of danger, conflict or havoc. Risk and Opportunities British Energy Shell to see how the conflict has impacted them. Shell, a British energy conglomerate, said it expects to lose up to $5 billion as a result of its decision to leave Russia in the first quarter of 2022, one of the first signs of the sector's wider financial fallout from Vladimir Putin's invasion of Ukraine ( Zhongming, Z., & Wei, 2022). Such is a very huge risk that will take a lot of time to recover. Without professional control, the company can face a massive net loss for the 2022. Additionaly, some of the shell stocks fell drastically, for instance, i n London, Shell's stock fell more than 2%-Because of the decreased market value of a company, the

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10 likelihood of a takeover increases when its stock price decreases (Khali, 2022). A diversified collection of investors often holds publicly listed company shares. However rragrdles of these risks, there still exists a chance of rising up again, the risks can be mitigated to bring forth grat opportunities for shell company. Shell reported record earnings of $9.13 billion in the first quarter of 2022, prompting lawmakers to consider increasing gas company taxes to assist individuals struggling to keep up with rising prices ( Boungou and Yatié, 2022) . This shows that the company still has potential to grow and get out of the deep created by exiting Russia. Stakeholders Research shows that the stakeholders affected by the issue are; The shell company and shell customers and shell stakeholders. All stakeholders will be affected due to the high losses in cash and assets. During the recovering phase, the stakeholders will have to bear the repercussions as they await for the company to re gain its momentum. Foreign exchange losses and the abandonment of its shares in Russian oil giant Rosneft, which accounts for roughly one-third of the company's oil and gas production, have dealt a severe blow to the company and its shareholders. Sustainable Development Sustainability in development is key for the overall growth of a country or a company ( Schaltegger, et al., 2022). Russia’s choice to attack Ukraine has caused a lot of havoc in the oil industry. Bearing in mind that there are other ways of solving disagreements, Russia should have sought such. The attack on Ukraine has been a negative factor of development on Russia and Ukraine, as well as the entire globe. Russia is ne of the largets producers of Oil and natural gas. Choosing war is not a method of supporting sustainable development. Effects of oil prices increas has been felt all over the world. Most commodities depend on petroleum for transportation from one point to another. With the high increase of gasoline, an increase in living starndards has been felt globally. We might be looking at how Shell company has experienced a fall due to its exit from Russia but, the globe too is going through a rough patch too. Sustainable development calls for action that help maintain safe environments that will serve their purpose for future generation ( Yildirim, 2022). Conflict, genocide, high living standards and irrational decisions are not anywhere near sustainable development. Providing a better living for future generations: The major purpose of sustainable development is to provide a better future for future generations. The improvement

11 cycle occurs in the present while considering the impact on future generations. Sustainable development also refers to environmentally friendly events. As a result, it has an adverse effect on the environment. It ensures long-term monetary development: The development cycle ensures long-term monetary development by including various essential factors such as prudent speculation, environmental well- being, and future potential ( Silvestre and Ţîrcă, 2019) . As a result, practicable improvement is beneficial and accommodating in the development of a sustainable society. The conflicting nations should note this and avoid all the unnecessary wars and help grow the oil businesses. Businesses that work to achieve the SDGs can gain access to new markets, improve relationships with customers and stakeholders, and boost water productivity across supply chains and products. When more sustainable business practices are developed, operational efficiency will improve. As resources are better utilized and conserved, operations will be streamlined and expenditures will be reduced. Analysis British Power Shell is looking at the impact of the conflict on them. Shell, a British oil corporation, said it expects to lose up to $5 billion as a result of its decision to exit Russia in the first quarter of 2022, the first sign of the industry's larger financial fallout from Vladimir Putin's invasion of Ukraine. This is a major danger from which there will be no quick recovery. The corporation could risk a large net loss in fiscal year 2022|2023, if professional oversight is not provided. Furthermore, certain shell stocks plummeted; for example, Shell's price dropped more than 2% in London. When a company's stock price falls, its market value drops, which increases the possibility of a takeover. Shares of publicly traded companies are frequently held by a diverse group of investors. However, there is still a chance that these hazards will resurface, and the risks can be controlled in order for the shell firm to benefit greatly. Shell's first-quarter earnings of $9.13 billion prompted lawmakers to propose hiking gas company taxes to help people trying to keep up with rising prices. This shows that the corporation still has room to expand and climb out of the hole it dug when it left Russia. Total Energies strongly condemns Russia's military action in Ukraine, which has resulted in human rights breaches and puts Europe in jeopardy. Complete Energies expresses its solidarity with both Ukrainians and Russians who are suffering as a result of the results. Total Energies was established to give gasoline and help to

12 Ukrainian tourists through Europe. Total Energies believes in the scope and gravity of Europe's accords, and will execute them (which are now being discussed) regardless of the impact on its Russian operations Total Energies, on the other hand, has decided not to invest in any new Russian projects. Total energies appear to be thriving regrdles of the Ukrainian conflict, rather than shells. Despite the outcry and scorn from the business community, Total Energy chose to remain in Russia, despite the departure of Shell and other companies. Total Energies, on the other hand, appears to have dispersed its product source so that they have other sources besides Russia—such steps are sensible and sustainable in order to avoid a raw material shortage in times of danger, conflict, or chaos. Risk and Opportunities Shell to perceive what the contention has meant for them. Shell, a British energy combination, said it hopes to lose up to $5 billion because of its choice to leave Russia in the principal quarter this year, perhaps the earliest indication of the area's more extensive monetary aftermath from Vladimir Putin's attack of Ukraine. Such is an exceptionally colossal gamble that will require some investment to recuperate. Without proficient control, the organization can confront an enormous total deficit. Additionaly, a portion of the shell stocks fell definitely, for example, in London, Shell's stock fell over 2%-Because of the diminished market worth of an organization, the probability of a takeover expands when its stock cost diminishes (Mc William et al., 2022). Anyway rragrdles of these dangers, there actually exists a possibility ascending once more, the dangers can be relieved to deliver grat potential open doors for shell organization. Shell announced record extraordinary income in the principal quarter of 2022, provoking officials to consider expanding gas organization charges to help people battling to stay aware of rising costs. This shows that the organization actually can possibly develop and escape the profound made by leaving Russia. A broadened assortment of financial backers frequently holds openly recorded organization shares. Applying Sustainable Development The relationship between monetary growth and efficiency improvement is difficult. They're both made of the same stuff: you can't have faster monetary growth without improving efficiency. Similarly to the need to be supported if a meaningful effect is to be achieved, ensuring sustainable improvement with increased efficiency in all areas of the economy is critical (Balalova et al.,2022) . While it may be easier to

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13 achieve short-term gains at the expense of long-term progress, comfortable methods do not provide a solid foundation for long-term efficiency development. Sustainable development must be integrated into enterprise planning and monitoring systems if it is to realize its full potential. Sustainable development is built on three efficiency pillars: monetary growth, environmental balance, and social progress (Khan et al., 2021) . To achieve practicable efficiency increases, it will assist in providing the necessary assistance for unit efficiency development at the shell venture level. Sustainable development will provide an extra benchmark for evaluating the created approaches and execution by company executives ( Bogovi z et al., 2022) . Benchmarking data will enhance reasonable outcomes and give a platform for analyzing the obligation to manageable outcomes standards, as stated above. As the organization, controllers, and the general public seek better ways to resuscitate Shell, this benchmark data will be a vital starting point. The assessment models for an efficiency-connected sustainable advancement will incorporate fortunate turn of events and financial growth, as well as partner involvement in sustainable development obligations. Shell appears to be lacking in information and resources to make significant changes or advancements to their businesses. With motivation waning and the financial benefits of going green being called into question, there is a greater need to focus on ensuring that practical improvement is both feasible and profitable. The development of self-direction and creative endeavors are important indicators of progress ( Nosratabadi, ey al., 2019) . However, the methods used thus far are only the beginning of a long and complex process that will lead to more appropriate endeavors. We need better organization, a better climate, peace, and prosperity. If these actions would be takeen and used to the latter, the company could regain its reputation and prominence in a period of 3 financial years. Careers With the risks and opportunities stated here, conflict resolution experts, energy consultants and sustainability managers could be really helpful in the shell crisis or any other similar case that can occur. Such individuals would advice the stakeholders accordingly and avoid the occurrence of rash and un informed decisions. Conflict consultant would advice shell to hold on Russia for a while till it gets another oil supplier rather that moving out of Russia and incurring huge losses. Energy

14 consultants would come in handy in advising the company on the next destination to seek for a different oil and gas source. The sustainability manager would overse that all decisions made are sustainable and will help the company grow massively with time to avoid failure due to lack of sustainable goals and policies. Additionally, such professionals would advice on contributing to CSR. I would love o venture int sustainable management career, its obvjectives and roles a re quite an inspiration and would also help me in my personal life to make sustainable decisions at all times.

15 References Balalova, E. I., Machabeli, M. S., Rudakova, T. V., Arionchik, A. A., & Biryukov, A. A. (2022). Advanced Innovations in the Field of Sustainable Development and Prospects for Their Development and Implementation on the Basis of Cooperation. In Сooperation and Sustainable Development (pp. 1123-1129). Springer, Cham. Bogoviz, A. V., Suglobov, A. E., Maloletko, A. N., & Kaurova, O. V. (2022). Сooperation and Sustainable Development . Springer Nature. Boungou, W., & Yatié, A. (2022). The impact of the Ukraine–Russia war on world stock market returns. Economics Letters , 110516. Felbermayr, G. J., Mahlkow, H., & Sandkamp, A. N. (2022). Cutting through the value chain: The long-run effects of decoupling the East from the West. Khan, I. S., Ahmad, M. O., & Majava, J. (2021). Industry 4.0 and sustainable development: A systematic mapping of triple bottom line, Circular Economy and Sustainable Business Models perspectives. Journal of Cleaner Production , 297 , 126655. McWilliams, B., Sgaravatti, G., Tagliapietra, S., & Zachmann, G. (2022). Can Europe manage if Russian oil and coal are cut off?. Bruegel-Blogs , NA-NA. Nosratabadi, S., Mosavi, A., Shamshirband, S., Kazimieras Zavadskas, E., Rakotonirainy, A., & Chau, K. W. (2019). Sustainable business models: A review. Sustainability , 11 (6), 1663. Pereira, P., Bašić, F., Bogunovic, I., & Barcelo, D. (2022). Russian-Ukrainian war impacts the total environment. Science of The Total Environment , 155865. Pestova, A., Mamonov, M., & Ongena, S. (2022). The price of war: Macroeconomic effects of the 2022 sanctions on Russia. Schaltegger, S., Christ, K. L., Wenzig, J., & Burritt, R. L. (2022). Corporate sustainability management accounting and multi‐level links for sustainability–A systematic review. International Journal of Management Reviews . Silvestre, B. S., & Ţîrcă, D. M. (2019). Innovations for sustainable development: Moving toward a sustainable future. Journal of cleaner production , 208 , 325- 332. Sun, M., Song, H., & Zhang, C. (2022). The Effects of 2022 Russian Invasion of Ukraine on Global Stock Markets: An Event Study Approach. Available at SSRN 4051987 .

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16 Yildirim, S. (2022). The consumer role for sustainable development: how consumers contribute sustainable development goals. In Research Anthology on Measuring and Achieving Sustainable Development Goals (pp. 872-888). IGI Global. Zhongming, Z., & Wei, L. (2022). Crude oil prices rise above $100 per barrel after Russia’s further invasion into Ukraine.

Ukranian War Effects on the Oil Industry

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