BP’s bruising Russian exit is almost worth the pain, says gfhay
have big interests in Russia. BP is rid of an asset that presented an increasing headache on environmental, social and governance grounds. In time, shareholders may even reward its remaining earnings with a higher multiple. Without the crisis in Ukraine, it’s a decision BP may not have made at all.- BP on Feb. 27 said it plans to abandon its 19.75% stake in oil giant Rosneft in the wake of Russia’s invasion of Ukraine, ending its 30 years of operating in the oil-rich country.
- BP Chief Executive Bernard Looney and Bob Dudley, the oil giant’s former CEO, will resign from Rosneft’s board. - BP said it would take an accounting charge to reflect the difference between the carrying value of the asset on BP’s balance sheet, which stands at $14 billion, and its fair value. - The company will also take a charge to reflect accumulated foreign exchange losses which had been previously charged against the company’s equity, but not its earnings. At the end of 2021 these stood at about $11 billion, BP said.
- Looney said he had been “shocked and saddened” by the situation in Ukraine which had caused the company to “fundamentally rethink” its Rosneft investment. BP Chairman Helge Lund said Russia’s military action “represents a fundamental change”.Editing by Peter Thal Larsen and Katrina HamlinReuters Breakingviews is the world's leading source of agenda-setting financial insight.
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