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Shell plc
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=== Operational risks === Russiaβs invasion of Ukraine has affected the safety and security of its people and operations in these and neighbouring countries. The resulting sanctions and export controls and the evolving geopolitical situation have caused wide-ranging challenges to its operations which could continue in the medium to longer term.<ref name=":0" /> The estimation of proved oil and gas reserves involves subjective judgements based on available information and the application of complex rules. This means subsequent downward adjustments are possible.<ref name=":0" /> Shell's future hydrocarbon production depends on the delivery of large and integrated projects and its ability to replace proved oil and gas reserves.<ref name=":0" /> The nature of Shell's operations exposes it, and the communities in which it works, to a wide range of health, safety, security and environment risks.<ref name=":0" /> A further erosion of the business and operating environment in Nigeria could have a material adverse effect on the company.<ref name=":0" /> An erosion of Shell's business reputation could have a material adverse effect on its brand, its ability to secure new resources or access capital markets, and on its licence to operate.<ref name=":0" /> Shell relies heavily on information technology systems in its operations.<ref name=":0" /> Shell's business exposes it to risks of social instability, criminality, civil unrest, terrorism, piracy, cyber disruption and acts of war that could have a material adverse effect on the company operations.<ref name=":0" /> Production from the Groningen field in the Netherlands causes earthquakes that affect local communities.<ref name=":0" /> Shell is exposed to treasury and trading risks, including liquidity risk, interest rate risk, foreign exchange risk and credit risk. The company is affected by the global macroeconomic environment and the conditions of financial and commodity markets.<ref name=":0" /> The company's future performance depends on the successful development and deployment of new technologies that provide new products and solutions.<ref name=":0" /> Shell has substantial pension commitments, the funding of which is subject to capital market risks and other factors.<ref name=":0" /> The company mainly self-insure its hazard risk exposures. Consequently, the company could incur significant financial losses from different types of risks that are not insured with third-party insurers.<ref name=":0" /> Many of the company's major projects and operations are conducted in joint arrangements or with associates. This could reduce Shell's degree of control and its ability to identify and manage risks.<ref name=":0" /> Shell undertakes large-scale projects, such as oil and gas field development or refinery expansions. Delays or cost overruns in these projects can impact profitability and investor confidence.
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