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BP PLC on Friday said it has seen a significant, detrimental impact from its decision to exit its shareholding in Russian oil company PJSC Rosneft, as well as other Russian assets.
Back in February, the London-based oil major said it would be withdrawing its 20% shareholding in Moscow-based Rosneft, due to Russia’s invasion of Ukraine.
BP’s Chief Executive Officer Bernard Looney also resigned from the Rosneft board. International staff were instructed to leave the country, while BP withdrew its other businesses in Russia, including lubricants and aviation.
On Friday, BP said that it had taken a post-tax charge of $24.4 billion in the first quarter of 2022 as a result of this decision.
It no longer reports any equity share of oil and gas reserves, production or earnings from Rosneft.
This has reduced its reported oil and gas reserves by more than 50%, reported oil and gas production by around one third, and reported earnings by around $2 billion a year, it noted.
BP said it is aware of statements regarding Rosneft’s payments of dividends, but said it has not received any money from Rosneft since its decision to exit its shareholding in February.
In the first nine month of 2021, BP had booked a $1.87 billion contribution to profit from its investment in Rosneft.
Regarding the disposal of its shareholding in Rosneft, BP said the process continues to be complex, due to both international sanctions and Russian regulations.
It argued that while it is ‘actively engaged’ in marketing the asset, its ability to sell is constrained by Russian legislation and the Russian government, who have effective approval rights on any buyer.
BP said that, as anticipated, the sale has proved to be a drawn-out process.
BP shares were trading 1.3% lower at 457.95 pence each in London on Friday afternoon.
By Holly Beveridge; Alliance News reporter
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