BP announces plans to divest stake in Russian oil company Rosneft

THE BP said on Sunday (27) that it plans to abandon its 19.75% stake in Russian oil giant Rosneft after the Russia’s invasion of Ukraineabruptly ending 30 years of operation in the oil-rich country.

The British giant Petroleum and gas did not say how it plans to get rid of the stake, which it said would result in charges of up to $25 billion at the end of the first quarter. Rosneft accounts for about half of BP’s oil and gas reserves and a third of its production.

“I was deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected. This has led us to fundamentally rethink BP’s position with Rosneft,” said BP Chief Executive Bernard Looney.

The decision represents the boldest step by a Western oil company with exposure to Russia amid a growing crisis between the West and Moscow.

BP said the news would not affect its short-term and long-term financial goals, which include a strategy of moving away from oil and gas to low-carbon fuels and renewable energy.

Looney and his predecessor Bob Dudley will step down from the board of Rosneft, which BP acquired after the sale of $12.5 billion worth of TNK-BP stock in 2013.

The Business Secretary of United KingdomKwasi Kwarteng, who on Friday expressed “concern” about BP’s participation in Rosneft in a call with Looney, said on Twitter that he liked the decision.

“Russia’s unprovoked invasion of Ukraine should be a wake-up call to British companies with commercial interests in Putin’s Russia,” he said.

As a result of the participation, BP received income from Rosneft in the form of dividends that totaled about $640 million in 2021, about 3% of cash flow from BP’s operations.

See images of the Russian invasion of Ukraine