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British energy giant Shell has said that it may take a hit of up to $5bn in the first quarter of 2022, due to its withdrawal from Russia.

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The company decided to exit its Russian operations in response to the country’s invasion of Ukraine, including the divestment of stakes in joint ventures with Russian state energy firm Gazprom, and related entities.

The British energy giant also warned investors that extreme price volatility in the first quarter may also adversely impact its cash flow.

“Reflecting the unprecedented volatility in commodity prices prevailing up to the end of the quarter, material additional movements could be seen in cash flow from operations,” the statement read.

The London-listed company also noted that it would honour the pre-conflict contracts to purchase fuel from Russia, as it is ‘legally obliged’ to take the delivery.

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Shell tendered an apology last month after receiving intense criticism for not halting Russian oil and gas purchases.

In its preview of its first-quarter results, Shell also said it expects its indicative refining margin to rise to approximately $10.23 per barrel, compared to $6.55 per barrel in the fourth quarter of 2021.

The company expects refinery utilisation to be between 70% and 74%, which is more than the fourth quarter of 2021.

Sales volumes from products could come in between 1.5 million and 2.3 million barrels, while marketing sales volumes are expected to be in the 2.2 million to 2.6 million barrels range.

Reports also emerged stating that Shell plans to exit from the $11.2bn Nord Stream 2 pipeline, which runs between Russia and Germany.