The British oil giant British Petroleum (BP) announced tonight (Sunday) that it will sell its holdings in the Russian oil company Rosneft, holdings that currently stand at 19.75% of the company. The board of directors convened for an emergency discussion on the issue last Friday, and today the final decision was announced by the company’s CEO Bernard Lonnie.
In addition, Lonnie himself submitted his resignation from the board of directors of Rosneft. Leg Lund, chairman of BP, said the company had worked for more than 30 years with “amazing colleagues in Russia” but the invasion signified a fundamental change: “The Russian attack on Ukraine is an act of aggression that will have tragic consequences throughout the region.” Who will be the buyer of these shares – and at what price.
BP’s holdings in Rosneft generated $ 640 million in 2021, and the rise in oil prices predicted a dividend of over $ 1 billion. The total value of BP’s stake in Rosneft was estimated by the company at $ 14 billion at the end of 2021, which it will be forced to record as a loss. In addition, exchange rate differences led to an additional loss of $ 11 billion. In total, the company (currently valued at about $ 90 billion) is expected to officially lose $ 25 billion as a result of the move.
The decision was made in part following pressure from Kwasi Quarteng, the British Minister for Business, Energy and Industrial Strategy. Britain has led a clear anti-Russian line since the start of the Russian invasion of Ukraine last week, and BP may have faced severe restrictions on trade with Russia anyway due to sanctions, including Russia’s expected disconnection from the global interbank communications system SWIFT. In the last ten days, the Russian stock market has lost over 30% of its value, and the war, sanctions and similar moves by Western companies may lead to further declines.