BP, Equinor exiting stakes in Rosneft

LONDON / OSLO

British energy giant BP announced on Feb. 27 that it was pulling its 19.75-percent stake in Rosneft following Russia’s invasion of Ukraine.

London-based BP has held a 19.75 percent stake in Rosneft since 2013. That stake was valued at $14 billion at the time of the announcement.

BP’s chief executive Bernard Looney also announced that he was resigning from the Russian oil company’s board “with immediate effect.”

Looney was one of two BP-nominated directors, having held the position since 2020. The other is former BP CEO Bob Dudley, who has also resigned, said BP.

“Russia’s attack on Ukraine is an act of aggression which is having tragic consequences across the region,” said the company’s chairman, Helge Lund.

“BP has operated in Russia for over 30 years, working with brilliant Russian colleagues,” he added. “However, this military action represents a fundamental change.”

Kwasi Kwarteng, Britain’s business minister, welcomed the announcement.

“Russia’s unprovoked invasion of Ukraine must be a wake up call for British businesses with commercial interests in Putin’s Russia,” he tweeted.

“The decision to exit the Rosneft stake will be an eye wateringly expensive one for BP,” wrote Susannah Streeter, a senior analyst with Hargreaves Lansdown. “But the shocked board clearly felt they had no option but to pay the high price and distance the business from Russia’s aggression.”

Just two weeks ago, Looney had said that BP’s share in Rosneft remained a core part of its operation, she noted.

The decision “shows the extent to which corporate Britain is now under pressure to make very stark choices faced with the sharply escalating situation,” Streeter added.

“BP has come under unprecedented pressure from both the regulator and its shareholders. BP’s decision was preceded by a Western media campaign full of false reports and conclusions,” Rosneft said in a statement on its website that was translated by The Associated Press.

“The decision of the largest minority shareholder of Rosneft destroys the successful, 30-year-long cooperation of the two companies.”

It is not clear exactly how BP will unwind its holdings, or who might step up to buy them.

Rosneft’s partnerships with Western oil and gas companies have been stymied before.

In 2011, Exxon Mobil, led at the time by future U.S. Secretary of State Rex Tillerson, signed a deal with Rosneft to potentially drill in the oil-rich Russian Arctic. But Exxon ended that partnership in 2017, citing U.S. and European sanctions against Russia.

Equinor to pull out of Russia

Norway’s state-owned energy giant Equinor said Monday it would stop its investments in Russia and pull out of its joint ventures in the country following Moscow’s invasion of Ukraine.

Equinor had $1.2 billion in assets at the end of last year in Russia, where it has had a partnership with Russian oil company Rosneft since 2012.

“In the current situation, we regard our position as untenable,” Equinor’s president and chief executive Anders Opedal said in a statement.

“We will now stop new investments into our Russian business, and we will start the process of exiting our joint ventures in a manner that is consistent with our values,” he added.

On Sunday, British energy giant BP announced that it was pulling its 19.8-percent stake in Rosneft following the Russian assault.

The Norwegian company produces some 25,000 barrels of oil equivalent per day in Russia, a fraction of its total production, which is around two million barrels of oil equivalent per day.

Norway is a non-EU member but has applied the same sanctions against Russia as the European Union since the start of the Ukraine invasion.

On Sunday, the Norwegian government announced that the country’s sovereign wealth fund, the world’s biggest, would pull out of Russia where it had 2.5 billion euros in shares and bonds at the end of last year.