bp's exit from Rosneft to cost US$25bn

bp bows to international pressure following Russian invasion of Ukraine and will off load near 20% stake in Russia state-owned enterprise Rosneft

bp has confirmed it will off load its 19.75% stake in Rosneft in a move which will cost the company $25bn.

In a statement, the company - which has held a stake in the Russian state-owned enterprise for nine years - cited a US$14bn 'carrying value' and US$11bn non-cash adjustment item charge. It will not report Rosneft as a separate segment from Q1 2022 results, and plans to remove Rosneft dividend payments. 

CEO Bernard Looney is resigning from the Rosneft board with immediate effect along with former bp group chief executive Bob Dudley.

"I have been deeply shocked and saddened by the situation unfolding in Ukraine ... I am convinced that the actions we have taken as a board are not only the right thing to do, but are also in keeping with the long-term interests of bp," said Looney. 

bp chair Helge Lund said Russia's military action represents a "fundamental change" and led the board to conclude that its involvement with Rosneft simply cannot continue - following unprecedented political, investor and consumer pressure on the oil major. 

Despite bp's announcement, it remains unclear who will buy its stake in Rosneft, whether the carrying value will be written off or if Russia may expropriate the stake.

Earlier this month bp reported Q4 profits of US$4.1bn and annual profits of US$12.85bn (click here), and was entering 2022 "with growing confidence" and capitalising on opportunities that the energy transition presents.

But the dramatic events of the last week illustrate how quickly things can change, sending shockwaves throughout the industry.

Norway's US$1.3trn sovereign wealth fund, the world's largest, will divest its Russian assets following Russia's invasion of Ukraine, the Norwegian prime minister said on Sunday, according to Reuters.


Featured Articles

Honeywell debunks hydrogen energy and its global challenges

Maya Gomez, Director of Green H2 CCM at Honeywell, uncovers the different types of hydrogen and the challenges of applying them for more sustainable energy

ABB Motion & WindESCo partner to strengthen wind energy

ABB Motion invests in WindESCo to sustain wind turbine performance, in a renewable energy drive that will help ABB in its net zero ambitions

Shell Energy UK and Germany acquired by Octopus Energy

Octopus delivers industry leading service whilst investing in clean energy systems — we will deliver this to the new customers too, says CEO Greg Jackson

Sustainability LIVE links to energy and electrification


Green energy: A hot topic at Sustainability LIVE 2023


Sustainability LIVE London sells out on 2023 conference