Topline
Following pressure from the British government, British Petroleum announced Sunday it would be exiting its 19.75% ownership of Rosneft, a Russian state-owned oil firm that supplies Russia with much of its fuel, citing the country’s attack on Ukraine.
LONDON – OCTOBER 26: The Petrol station forecourt for BP, the world’s second largest oil company, … [+]
Key Facts
BP CEO Bernard Looney and former group chief executive Bob Dudley are resigning from Rosneft’s board, and the company says it will “exit its other businesses with Rosneft within Russia.”
BP’s severance from Rosneft followed pressure from the British government, with UK business secretary Kwasi Kwarteng summoning Looney to a meeting Friday to express the country’s concern about BP’s ties to the Russian energy group, according to the Financial Times.
Kwarteng commended BP for its decision on Twitter Sunday, calling the invasion “a wake up call for British businesses with commercial interests in Putin’s Russia.”
Rosneft is one of the main suppliers of fuel to the Russian military, and the Russian government holds a 40% direct stake in the company.
Bloomberg estimates BP could take a financial hit potentially worth $25 billion following the exit.
Crucial Quotes
“Russia’s attack on Ukraine is an act of aggression which is having tragic consequences across the region,” BP chair Helge Lund said in a press release. “It has led the bp board to conclude, after a thorough process, that our involvement with Rosneft, a state-owned enterprise, simply cannot continue.” Looney added, “I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected.”
Key Background
British elected officials Margaret Hodge and Ed Davey, among others, called for BP’s divestment from Rosneft earlier this week, with Hodge accusing BP of “fueling the invasion of Ukraine and profiting from Putin’s maniacal aggression,” in a statement to the the Financial Times released Friday.
What We Don’t Know
It is unclear if BP will sell its 19.75% stake in Rosneft, or simply walk away. Bloomberg notes the growing number of economic sanctions placed on Russia would make a potential purchase of the stake difficult for a buyer.
Source: https://www.forbes.com/sites/masonbissada/2022/02/27/bp-drops-nearly-20-stake-in-russian-owned-oil-firm-after-invasion-of-ukraine/