The British energy company is taking a drastic step.
(Photo: REUTERS)
Dusseldorf On Sunday evening, the British oil giant BP made a decision that will cost it billions: the energy company is selling its almost 20 percent stake in the Russian oil producer Rosneft. In addition, both BP boss Bernhard Looney and his predecessor Bob Dudley are giving up their seats on the supervisory board of the Moscow state-owned company with immediate effect. The control body is headed by former Chancellor Gerhard Schröder – as before.
“For 30 years, BP has worked seamlessly with colleagues from Russia,” said Helge Lund, board member of the British oil company, “but this war means a fundamental change.” After a thorough examination, it was therefore decided that the relationship could not continue. Rosneft is no longer compatible with BP’s strategy.
UK Business Secretary Kwasi Kwarteng backed BP’s decision. “Russia’s unprovoked invasion of Ukraine must be a wake-up call for British companies that have business interests in President Vladimir Putin’s Russia,” he wrote on Twitter.
Nine years ago, BP secured shares in Russia’s largest oil company, making billions in profits every year. Around five percent of global oil production is produced by Rosneft. In the first quarter of the current year, the withdrawal from business with Russia will bring the British billions in losses.
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Billions in losses priced in
Because of the exit, BP will write off up to $25 billion by the end of the first quarter, it said in a statement on Sunday. After all, the stake in Rosneft, at almost three billion dollars, contributed more than 20 percent of BP’s total profit last year alone. In 2025, the London-based company is still expecting a two billion lower profit due to the lack of billions from the Russian business.
“I am convinced that this decision is the only right one,” said BP boss Looney. “Also for our shareholders.” While BP’s Rosneft shares were still worth almost $14 billion at the end of 2021, the price of the Russian oil company has already fallen by almost 40 percent since mid-February. BP also does not want to continue other business with Rosneft in Russia in the future.
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