British Petroleum, a multinational oil firm, has confirmed the exit of its 19.75% shareholding in Russia-based Rosneft firm after the invasion of Ukraine. In an official statement, BP also announced the resignation of the firm’s CEO Benard Looney from the Rosneft board.
Concurrently, former BP group chief executive Bob Dudley has also resigned from the board with an instant effect. Nonetheless, BP never explained how the exit was arrived at but said that the entire process would accumulate charges of up to $25 billion by the end of the first quarter.
Based on Helge Lund, BP’s chair, Russia’s invasion of Ukraine does not align with the firm’s business strategy. Lund said:
“We can no longer support BP representatives holding a role on the Rosneft board. The Rosneft holding is no longer aligned with BP’s business and strategy, and it is now the board’s decision to exit BP’s shareholding in Rosneft. The BP board believes these decisions are in the best long-term interests of all our shareholders.”
The UK-based oil group added that it has stopped reporting reserves, production, and profit from Rosneft after the exit. Furthermore, BP noted that any changes in the accounting treatment of the Rosneft shareholding would result in what the firm termed as “material non-cash charge.”
Nevertheless, reports accessed by Finbold stated that BP notified shareholders that the firm’s financial frame and distribution guidance has so far remained unchanged. BP’s announcement comes as many other nations are piling pressure and sanctions on Russia after the government started military action in Ukraine.
Authorities Summoned British Petroleum
In recent weeks, Looney was summoned by the UK authorities to discuss BP’s position in Russia. Interestingly, the United Kingdom is among the leading nations that are pushing for tougher sanctions against Russia. Looney said:
“I am convinced that the decisions we have taken as a board are not only the right thing to do but are also in the long-term interests of BP.”
Previously, BP had acknowledged that sanctions on Russia may be challenging for its business in the nation. The firm also added that it will continue to comply with all the relevant international trade rules and sanctions.
