The London-based group announced it will exit its 19.75% shareholding worth $14 billion in Russian energy group Rosneft. At the same time, its current and former CEOs will resign from the Russian company’s board. Bernard Looney has been a director of Rosneft since 2020, Bob Dudley since 2013. BP will also pull out of all joint ventures.

BP chair Helge Lund called Russia’s attack on Ukraine “an act of aggression that is having tragic consequences across the region.” Therefore, he said the British group’s strategy is no longer aligned with the holding, and it can no longer support its representatives holding a role on the Rosneft board.

For BP’s financial reporting, the change in accounting treatment also means that it will no longer recognize a share in Rosneft’s net income, production and will no longer report the Russian company as a separate segment. BP said it has additionally removed Rosneft dividend payments from its financial frame.  

The London-based energy group reportedly was under pressure from the British government to end the Rosneft relationship, which dates back to the 1990s. BP has confirmed that business and energy secretary Kwasi Kwarten called Looney to a special meeting over the weekend to explain the Russian engagement.

Holding onto the business relationship in any case would be difficult in view of the sanctions being imposed by the US and Europe on Russia as a result of the invasion, in particular plans to remove certain Russian banks from the SWIFT payments system. Leading Western computer chip manufacturers have also said they will halt sales to Russia.

BP did not specify how it planned to divest the Rosneft investment. Business newspaper Financial Times pointed to analyst speculation that a state-backed Chinese or Middle Eastern group might be interested. The Qatar Investment Authority is already a major Rosneft shareholder. A costlier move would be writing off the shareholding.

Before BP’s announcement, Norway’s sovereign wealth fund said it planned to divest all of its Russian assets, a move seen as likely to increase pressure on other oil and gas majors such as Shell, TotalEnergies and ExxonMobil, to quit the country.

Author: Dede Williams, Freelance Journalist