WSJ -- BP to Exit From Stake in Russia’s Rosneft Following Pressure From U.K. ......................
Feb. 27, 2022
12:45 pm ET
BP to Exit From Stake in Russia’s Rosneft Following Pressure From U.K.
Divestment follows talk between CEO and U.K. official, could result in substantial loss
By Jenny Strasburg
BP PLC said Sunday it will exit its nearly 20% stake in Russian oil producer Rosneft, days after it was pressured to unload the holding by the U.K. government amid Russia’s invasion of Ukraine.
BP Chief Executive Bernard Looney and former CEO Bob Dudley will resign from Rosneft’s board, the British company said. The divestment could result in a charge of more than $20 billion for BP, depending on how it manages the exit. BP valued the Rosneft stake at $14 billion at the end of 2021, according to the company.
The potential charge includes $11 billion in accumulated foreign-exchange losses on BP’s books. A change in the nature of BP’s Rosneft relationship will affect how those losses are accounted for, the company said.
The abrupt move comes after Mr. Looney held a conversation Friday with Kwasi Kwarteng, British Secretary of State for Business, Energy and Industrial Strategy, a person familiar with the matter said. Mr. Kwarteng expressed deep concern about BP owning the stake.
BP board members held emergency meetings Friday and over the weekend to discuss the situation, according to a person familiar with the matter.
BP will be looking to exit from the stake at a tumultuous time for Russian companies, potentially affecting its ability to recover the $14 billion carrying value of the stake. A potential write-down would be based on the carrying value of the Rosneft stake at the end of the first quarter.
The U.K. company is the oil-and-gas majors most exposed to Russia, analysts say. BP’s 19.75% stake in Rosneft brought it $640 million in dividends in 2021. Analysts expected 2022 dividends to be worth well over $1 billion.
More to come...
Write to Jenny Strasburg at jenny.strasburg@wsj.com
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