TIMES.KY

Cayman Islands, Caribbeanand International News
Saturday, Feb 04, 2023

BP to offload stake in Rosneft amid Ukraine conflict

BP to offload stake in Rosneft amid Ukraine conflict

BP is to offload its 19.75% stake in Russian state-owned oil firm Rosneft after Russia's "act of aggression in Ukraine".

The oil giant had come under pressure from the UK government to make the move since Thursday's invasion.

It has held the shareholding in the Russian company since 2013.

BP chief executive Bernard Looney has resigned "with immediate effect" from the Rosneft board, as has fellow BP-nominated director Bob Dudley.

Rosneft said thirty years of successful cooperation had been ruined and blamed BP's decision on "unprecedented political pressure", according to reports from Russian news agencies.

Mr Looney had been on the Rosneft board since 2020, alongside its chairman Igor Sechin, who is a close friend and ally of Russian President Vladimir Putin.

The PA News agency reported Mr Looney was in Russia as recently as October, when he appeared on a panel with Mr Putin, which he later described as a "privilege".

Business Secretary Kwasi Kwarteng spoke to the BP boss on Friday and left him in "no doubt about the seriousness of government concerns about BP's overexposure to Russian interests" according to an official.

BP chairman Helge Lund said that, while BP had operated in Russia for more than 30 years and had "brilliant Russian colleagues", Russia's attack on Ukraine was "having tragic consequences across the region" and represented 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."


BP's share in Russian state oil giant Rosneft has long felt uncomfortable; this week under heavy political pressure it became untenable.

The chairman of Rosneft, Igor Sechin, is a close ally of President Putin. Rosneft supplies fuel to the Russian army.

Immediately offloading the stake to a potentially inappropriate buyer was not an option.

The company has decided to "divest" - meaning it will sever its financial ties with Rosneft, stop taking a dividend and step back from its two seats on the board.

Company officials say it is too soon to say exactly how this stake will be disposed of.

It could potentially be seized, or sold.

It will mean a significant financial hit, but a price BP had little choice but to pay.

Mr Looney said that he had been "deeply shocked and saddened" by the situation in Ukraine and it had caused BP to fundamentally rethink its position with Rosneft.

"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," he said.

Mr Kwarteng welcomed the move, saying: "Russia's unprovoked invasion of Ukraine must be a wake-up call for British businesses with commercial interests in Putin's Russia."

A Rosneft oil rig drilling the first exploration well in the Khatanga Bay, Russia


BP's latest annual results, published two weeks ago, revealed Rosneft accounted for $2.7bn (£2bn) of its profits, about a fifth of its total.

The multinational, which has its headquarters in London, admitted last year that sanctions on Russia could be problematic for its business and the relinquishing of the Rosneft stake comes after western countries imposed a series of economic sanctions on Russia - including several banks being excluded from the Swift international payment system.

BP said it is too early to say how or to whom its stake in Rosneft will be offloaded. The firm will pay a $11bn charge when it writes off foreign exchange losses that have accumulated over the last few years and another charge relating to the value of its stake.

Rosneft has been under sanctions from the US and EU since Russia annexed Crimea in 2014.

Norway's $1.3 trillion (£970bn) sovereign wealth fund, which is the world's largest, also announced it would freeze and divest its Russian assets on Sunday.

"We have decided to freeze the fund's investments and have begun a process of selling out," Norwegian Prime Minister Jonas Gahr Stoere said.

The fund's Russian assets were worth $2.83bn (£2.11bn) at the end of 2021. It is the fourth largest shareholder in Russian bank Sberbank and has stakes in Russian energy firms Gazprom and Lukoil.

Oil prices surged past $100 (£74) a barrel to hit their highest level for more than seven years after Russia launched its invasion of Ukraine.

The shipping firms FedEx and UPS have also suspended all their services in and out of Russia. United Parcel Service Inc. (UPS) said that packages in transit to Ukraine and Russia will be returned to their senders for no additional cost where possible.

Newsletter

Related Articles

TIMES.KY
Close
0:00
0:00
Charlie Munger, calls for a ban on cryptocurrencies in the US, following China's lead
EU found a way to use frozen Russian funds
First generation unopened iPhone set to fetch more than $50,000 at auction.
WARNING GRAPHIC CONTENT - US Memphis Police murdering innocent Tyre Nichols
Almost 30% of professionals say they've tried ChatGPT at work
Interpol seeks woman who ran elaborate exam cheating scam in Singapore
What is ChatGPT?
Bill Gates is ‘very optimistic’ about the future: ‘Better to be born 20 years from now...than any time in the past’
Tesla reported record profits and record revenues for 2022
Prince Andrew and Virginia Giuffre Photo Is Fake: Ghislaine Maxwell
Opinion | Israel’s Supreme Court Claims a Veto on Democracy
Moonwalker Buzz Aldrin Gets Married On His 93rd Birthday
Who’s Threatening Israeli Democracy?
Federal Reserve Probes Goldman’s Consumer Business
China's first population drop in six decades
Microsoft is finalising plans to become the latest technology giant to reduce its workforce during a global economic slowdown
China's foreign ministry branch in Hong Kong urges British gov't to stop the biased and double standards Hong Kong report
Tesla slashes prices globally by as much as 20 percent
1.4 Million Copies Of Prince Harry's Memoir 'Spare' Sold On 1st Day In UK
After Failing To Pay Office Rent, Twitter May Sell User Names
Lisa Marie Presley, singer and daughter of Elvis, dies aged 54
FIFA president questioned by prosecutors
Britain's Sunak breaks silence and admits using private healthcare
Hype and backlash as Harry's memoir goes on sale. Unnamed royal source says prince 'kidnapped by cult of psychotherapy and Meghan'
Saudi Arabia set to overtake India as fastest-growing major economy this year 
Google and Facebook’s dominance in digital ads challenged by rapid ascent of Amazon and TikTok
FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
TikTok CEO Plans to Meet European Union Regulators
UK chaos: Hong Kong emigrants duped by false prospectus
France has banned the online sale of paracetamol until February, citing ongoing supply issues
Japan reportedly to give families 1 million yen per child to move out of Tokyo
Will Canada ever become a real democracy?
Hong Kong property brokerages slash payrolls in choppy market
U.S. Moves to Seize Robinhood Shares, Silvergate Accounts Tied to FTX
Effect of EU sanctions on Moscow is ‘less than zero’ – Belgian MEP
Coinbase to Pay $100 Million in Settlement With New York Regulator
FTX assets worth $3.5bn held by Bahamas securities regulator
A Republican congressman-elect is under investigation in New York after he admitted he lied about his education and work experience.
Brazilian football legend Pele, arguably the greatest player ever, has died at the age of 82.
Hong Kong to scrap almost all its Covid rules
EU calls screening of travellers from China unjustified
US imposes Covid testing for visitors from China
Ukraine President Volodymyr Zelenskyy Addresses Joint Session of Congress - FULL SPEECH
If a country is denied the right to independence by another, it is not in a union. It is in a dictatorship.
Where is Rishi? Chancellor Jeremy Hunt's excuses about the UK's economic challenges just don't make sense
Former FTX CEO Bankman-Fried finally arrested in Bahamas after U.S. files charges
Corruption works: House Financial Services Chair Waters doesn't plan to subpoena her donor, Sam Bankman-Fried, to testify at hearing on FTX collapse
Ronaldo's new contract...
Prince William's godmother resigns honorary royal role after exposing her/their racism
British PM Rishi Sunak pledges further action on strikes to 'protect lives'
×