BP will offload its 19.75% stake in Rosneft under pressure from the UK government, BBC reported. The stake in the Russian state-owned oil company dates from 2013.
BP chief executive Bernard Looney has resigned from the Rosneft Board of Directors “with immediate effect”. Fellow BP-nominated director Bob Dudley followed in his footsteps.
Rosneft retaliates
Rosneft said three decades of successful cooperation were ruined and blamed BP’s decision on “unprecedented political pressure”, Russian news agencies reported.
According to BP chairman Helge Lund, Russia’s attack on Ukraine was “having tragic consequences across the region”. BP has indeed operated in Russia for more than three decades and has “brilliant Russian colleagues”, Lund admitted. However, the attack represents a diametric shift. Lund said:
It has led the BP board to conclude, after a thorough process, that our involvement with Rosneft, a state-owned enterprise, simply cannot continue.
Who will get the stake?
Immediately selling the stake to a potentially inappropriate buyer was not reasonable. Instead, the oil company has decided to “divest”. It will cut financial ties with Rosneft, step back from the board, and stop taking a dividend.
According to company officials, it is too early to say how the stake will be disposed of. It might be sold or seized.
Rosneft accounts for a fifth of BP’s profit
BP’s latest annual results, posted two weeks ago, showed Rosneft contributed $2.7 billion to its profits, about 20% of its total.
The British oil company will pay $11 billion in foreign exchange losses that have accumulated over the past several years. The value of its stake will incur an additional charge.
Oil surges past $100
Oil passed $100 (£74) a barrel, reaching a seven-year peak. In related news, Norwegian energy giant Equinor announced it would also begin divesting from its joint ventures in Russia.
UPS and FedEx have also suspended all their services in and out of Russia. United Parcel Service Inc. (UPS) announced that packages in the process of being shipped to Ukraine and Russia would be returned to their senders at no extra charge where possible.
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