BP to offload 19.75% stake in Russian oil firm Rosneft after Putin's 'act of aggression'

27 February 2022, 17:19 | Updated: 27 February 2022, 17:46

BP has held a 19.75% stake in the firm Rosneft since 2013.
BP has held a 19.75% stake in the firm Rosneft since 2013. Picture: Alamy

By Sophie Barnett

BP will end its 19.75% shareholding in Russian oil company Rosneft following Putin's "act of aggression in Ukraine".

Its chief executive Bernard Looney is also resigning from Rosneft’s board with “immediate effect”, the firm said in a statement.

BP said Russia's attack on Ukraine represented a "fundamental change" in how the company could operate there.

Rosneft is also part-owned by the Russian government, and BP has held a 19.75% stake in the firm since 2013.

BP's other Rosneft director Bob Dudley will also be resigning from Rosneft's board.

BP chairman Helge Lund said: "Russia's attack on Ukraine is an act of aggression which is having tragic consequences across the region. BP has operated in Russia for over 30 years, working with brilliant Russian colleagues. However, this military action represents a fundamental change.

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"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.

"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 move comes after Business Secretary Kwasi Kwarteng held a virtual call with Mr Looney for around 20 minutes on Friday to discuss the company's position.

Mr Kwarteng said: "I welcome BP's decision to exit its shareholding in Rosneft oil company.

"Russia's unprovoked invasion of Ukraine must be a wake-up call for British businesses with commercial interests in (Vladimir) Putin's Russia."

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BP admitted last year that sanctions on Russia could be problematic for its business, as global leaders are lining up to impose an even more stringent economic retaliation against the Kremlin.

The company, which co-owns Rosneft with the Russian government, said in its annual report that "events in or relating to Russia, including trade restrictions and other sanctions, could adversely impact our income and investment in or relating to Russia".

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The move was announced shortly after the European Commission president Ursula von der Leyen introduced further sanctions on the Kremlin.

The sanctions include a full ban of Russian aircraft over the EU and stopping the broadcast of state-owned Russia Today in EU countries.