BP chief executive Bernard Looney has spoken of his shock and sadness at the invasion of Ukraine after quitting the board of Russian state-owned Rosneft.
After more than three-decades operating in Russia, bp confirmed last night that it would exit its 19.75% shareholding in Rosneft, stating it "no longer aligned with bp’s business and strategy".
Mr Looney's predecessor, Bob Dudley, has also resigned firm the board of Rosneft with immediate effect.
'Right thing to do'
"Like so many, I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected," Mr Looney said.
"It has caused us to fundamentally rethink bp’s position with Rosneft. I am convinced that the decisions we have taken as a board are not only the right thing to do, but are also in the long-term interests of bp.
"Our immediate priority is caring for our great people in the region and we will do our utmost to support them. We are also looking at how bp can support the wider humanitarian effort.”
$14billion hit
Company officials say it is too soon to say exactly how this stake, worth $14billion, will be disposed of. It will likely mean a significant financial hit.
The resignations will require bp to change its accounting treatment of its Rosneft shareholding and, as a result, it expects to report a material non-cash charge with its first quarter 2022 results, to be reported in May.
bp chair 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. 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.”
'Wake-up call'
UK Business Secretary Kwasi Kwarteng backed bp's decision last night
"I welcome BP’s decision to exit its shareholding in Rosneft oil company," he said.
"Russia’s unprovoked invasion of Ukraine must be a wake up call for British businesses with commercial interests in Putin’s Russia."
Rosneft has been under sanctions from the US and EU since Russia annexed Crimea in 2014.
On Monday, Norwegian energy group Equinor announced its exit from Russia and said it would begin the process of divesting from its joint ventures in the country.
It came after Norway's $1.3trillion (£970bn) sovereign wealth fund, which is the world's largest, also announced that it would freeze and divest its Russian assets.
The fund's Russian assets were worth $2.83bn (£2.11bn) at the end of 2021. It is the fourth largest shareholder in Russian bank Sberbank and has stakes in Russian energy firms Gazprom and Lukoil.