BP has been forced to cut ties with the Kremlin-controlled energy giant Rosneft as it fuels Vladimir Putin’s assault on Ukraine.
The FTSE 100 oil giant will offload its 20pc stake in Rosneft, previously valued at $14bn (£10bn), and abandon its two seats on the board following pressure from the Government.
Bernard Looney, its chief executive, will step down from Rosneft’s board, as will Bob Dudley, the former BP boss, as it exits a three-decade venture in Russia.
The company said it is likely to take a significant financial hit from the sale.
It said it would also sell its investments in three joint ventures with Rosneft, while Mr Looney will separately resign from the board of the Russian Geographical Society. Separately, Norway said late on Sunday that its $1.3 trillion sovereign wealth fund would sell its Russian interests, around 0.2pc of its assets, which are worth around $2.8bn including stakes in Sberbank and Gazprom.
BP’s chairman Helge Lund called Russia’s invasion of Ukraine an “act of aggression which is having tragic consequences across the region”. He said the company’s stake in Rosneft was “no longer aligned with BP’s business and strategy”.
Mr Looney said war in Ukraine had “caused us to fundamentally rethink BP’s position with Rosneft”. BP said the changes meant it would no longer have “significant influence” over Rosneft and would therefore no longer report its financial results.
Kwasi Kwarteng, the Business Secretary, had summoned Mr Looney to a meeting on Friday and outlined concerns about BP’s links to a company that supplies the Russian military.
On Sunday, Mr Kwarteng called on other businesses to abandon their interests in Russia.
He said: “I welcome BP’s decision to exit its shareholding in Rosneft oil company.
“Russia’s unprovoked invasion of Ukraine must be a wake up call for British businesses with commercial interests in Putin’s Russia.”
Rosneft is run by Igor Sechin, a close friend and ally of Vladimir Putin and BP is its second-largest shareholder after the Russian state, which has a 40pc stake. It supplies most of Russia’s oil exports.
Mr Lund said: “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.”
