bp exits Russia by selling its 20% stake in Rosneft
After 30 years of operation in Russia, the oil company could take a hit of up to $25 billion with the exit.
The bp board announced that the global oil company will sell its 19.75% stake in Rosneft due to the invasion of Ukraine.
In addition to the sale, bp chief executive officer Bernard Looney is resigning from the board of Rosneft with immediate effect. The other Rosneft director nominated by bp, former bp group chief executive Bob Dudley, will also resign from the board.
Rosneft accounts for around half of BP's oil and gas reserves and a third of its production and divesting the 19.75% stake will result in charges of up to $25 billion, the British company said, without saying how it plans to extricate itself, according to Reuters.
“bp has operated in Russia for over 30 years, working with brilliant Russian colleagues. However, this military action represents 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. We can no longer support bp representatives holding a role on the Rosneft board,” said bp chair Helge Lund.
Bernard Looney has been a director of Rosneft as one of two bp-nominated directors since 2020. Bob Dudley has been a director of Rosneft since 2013.
As a result of the resignations of bp’s nominated directors, bp has determined that it no longer meets the criteria set out under International Financial Reporting Standards (IFRS) for having “significant influence” over Rosneft.
bp is the first major energy company to pull from Russia after the invasion of Ukraine – the move will put pressure on other foreign players operating in Russia.
