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- BP will exit its nearly 20 per cent stake in Russian oil giant Rosneft, ending a three decade operation in the energy-rich country
- The British oil giant will take a US$25 billion (A$35 billion), with Rosneft accounting for around half of BP’s oil and gas reserves and a third of its production
- This is the most significant move yet by a Western company in response to the Russian invasion of Ukraine
- Additionally, BP CEO Bernard Looney is resigning from the board of Rosneft with immediate effect
- The other director, nominated by BP, Bob Dudley, is also leaving the Rosneft Board
BP has dropped its stake in Russian oil giant Rosneft, ending a three-decade operation in the energy-rich country.
The British oil giant will take a US$25 billion (A$35 billion) hit as it exits its 19.75 per cent stake in Rosneft, which it has had since 2013.
Rosneft accounts for around half of BP’s oil and gas reserves and a third of its production.
This is the most significant move yet by a Western company in response to the Russian invasion of Ukraine.
Additionally, BP CEO Bernard Looney is resigning from the board of Rosneft with immediate effect. The other director, nominated by BP, Bob Dudley, is also leaving the Rosneft Board.
“Like so many, I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected. It has caused us to fundamentally rethink BP’s position with Rosneft,” Mr Looney said.
“I am convinced that the decisions we have taken as a board are not only the right thing to do, but are also in the long-term interests of BP. Our immediate priority is caring for our great people in the region and we will do our utmost to support them. We are also looking at how BP can support the wider humanitarian effort.”
Due to this news, BP will no longer meet the criteria set out under the International Financial Reporting Standards (IFRS) for having “significant influence” over Rosneft.
This will result in two material changes to the company’s financial reporting and financed for the first quarter of 2022, including an $US11 billion (A$15 billion) charge for foreign exchange losses that have accumulated since 2013.
BP Chair Helge Lund said Russia’s attack on Ukraine is “an act of aggression which is having tragic consequences across the region”.
“BP has operated in Russia for over 30 years, working with brilliant Russian colleagues. However, this military action represents a fundamental change. It has led the BP Board to conclude, after a thorough process, that our involvement with Rosneft, a state-owned enterprise, simply cannot continue.
“We can no longer support bp representatives holding a role on the Rosneft board. The Rosneft holding is no longer aligned with BP’s business and strategy and it is now the board’s decision to exit bp’s shareholding in Rosneft. The bp board believes these decisions are in the best long-term interests of all our shareholders.”
