BP to divest stake in Russian state-oil company Rosneft

Date:

BP is seeking to sell close to 20% of the shares in Russian state-owned oil company Rosneft, which it has held since 2013, in the sharpest sign to date of the company’s backlash against Moscow’s invasion of Ukraine.

The UK-listed oil group said in a statement on Sunday that it would no longer report on reserves, production or profits from Rosneft, and that its CEO, Bernard Lonnie, would resign from the Rosneft board “with immediate effect”.

BP did not specify how and when it might sell Rosneft’s shares. It can write off its holding, sell it back to Rosneft or find another buyer. Analysts have speculated that a state-sponsored Chinese or Middle East group may be interested in holding the shares, but it is estimated that BP may have difficulty finding a bidder. Qatar Investment Authority is already a major shareholder.

BP said changes in the accounting treatment for Rosenaft’s share would lead to two “substantial non-cash” charges in the first quarter results, which could total $ 25 billion: a $ 11 billion charge related to foreign exchange losses, and the same-time difference between “fair value” and ” The carrying value of the holding, which currently stands at $ 14 billion.

The second BP-nominated director, Bob Dudley, BP’s former CEO, will also retire from Rosenft’s board, Major Oil said.

Leg Lund, chairman of BP, described the Russian invasion of Ukraine as “an act of aggression that has tragic consequences across the region”.

He said BP had been operating in Russia for more than 30 years, “working with brilliant Russian colleagues.”

“However, this military action represents a fundamental change,” he added. The board concluded that the company’s involvement with Rosneft “simply can not continue,” Lund added.

BP’s move, which came at a time when Norway’s sovereign wealth fund has said it is scrapping all Russian assets, will increase pressure on other oil and gas companies and commodity traders with investments in Russia, such as Shell, TotalEnergies, ExxonMobil, Trafigura and Vitol.

BP has previously criticized 19.75% of its shares in Rosneft, which has been under US and EU sanctions since Russia annexed Crimea in 2014. But the Russian invasion of Ukraine, which led to sweeping sanctions against Putin’s regime, has heightened criticism of the partnership.

One UK asset manager with a large stake in BP described the move to downgrade the shares as a “good decision” and an “inevitable one”.

BP has said it will also leave three other joint ventures with Rosneft, which could put an end to a lucrative, though often controversial, 30-year relationship between BP and Russia. BP’s former joint venture with an oligarch consortium, TNK-BP, became so crowded in the 2000s that in 2008 Dudley, then head of the business, was forced to flee the country.

BP sold 50% of its shares in TNK-BP to Rosneft in 2013, for $ 12.5 billion in cash and one-fifth of the state-owned oil company.

Rosneft’s stake was Similarly profitable. Last year, BP reported earnings of more than $ 2.4 billion from holding shares and collected $ 640 million in dividends.

But as tanks, Potentially refueled with diesel from Rosneft – Main supplier to the Russian army – flowed to Ukraine, the account for the major oil in Britain changed.

Lonnie said he was “deeply and sadly shocked” by the attack, which “made us thoroughly rethink BP’s position with Rosenft.”

BP’s announcement came just days after Lonnie was summoned to a meeting with Kwasi Quarteng, the British business secretary, to discuss the company’s involvement in Russia.

Quartang said on Sunday: “I welcome BP’s decision to leave its holdings in the oil company Rosneft. Russia’s unprovoked invasion of Ukraine must be a wake – up call for British businesses with commercial interests in Putin’s Russia.”

Another report by Neil Home and Jim Picard in London

BP to divest stake in Russian state-oil company Rosneft Source link BP to divest stake in Russian state-oil company Rosneft

The post BP to divest stake in Russian state-oil company Rosneft appeared first on California News Times.

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Popular

More like this
Related

For Survivors, School Shootings a Lasting and Mean Companion

{"@context":"https://schema.org/","@type":"MedicalWebPage","mainEntityOfPage":"https://www.webmd.com/parenting/news/20220525/for-survivors-school-shootings-a-lasting-and-mean-companion","lastReviewed":"nulldate","reviewedBy":{"@type":"Person"},"about":"Violence (Sensitive Topic)","datePublished":"05/25/2022 19:15:38","headline":"For Survivors, School Shootings a Lasting...

Welcome CSFD’s new wellness therapy dog, Diesel! – Colorado Springs, Colorado

Colorado Springs, Colorado 2022-05-25 20:29:11 – Colorado Springs —...

Will Ethereum’s low gas fees help ETH go up the price chart

Ethereum, the largest altcoin seems to have done the...