Day: February 27, 2022

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BP Exiting Stake in Russian Oil and Gas Company Rosneft

BP said Sunday it is exiting its share in Rosneft, a state-controlled Russian oil and gas company, in reaction to Russia’s invasion of Ukraine.

BP has held a 19.75% stake in Rosneft since 2013. That stake is currently valued at $14 billion.

London-based BP also said its CEO, Bernard Looney, and former BP executive Bob Dudley will immediately resign from Rosneft’s board.

“Like so many, I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected. It has caused us to fundamentally rethink BP’s position with Rosneft,” Looney said in a statement.

Rosneft said it was informed of BP’s decision Sunday.

“BP has come under unprecedented pressure from both the regulator and its shareholders. BP’s decision was preceded by a Western media campaign full of false reports and conclusions,” Rosneft said in a statement on its website that was translated by The Associated Press. “The decision of the largest minority shareholder of Rosneft destroys the successful, 30-year-long cooperation of the two companies.”

BP Chairman Helge Lund praised the “brilliant Russian colleagues” BP has worked with for decades, but said Russia’s military action “represents a fundamental change.”

“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,” Lund said in a statement.

BP’s action was an abrupt turnaround from earlier this month. During a conference call with investors on Feb. 8, Looney downplayed concerns and said there were no changes to the company’s business in Russia.

“Let’s not worry about things until they happen. And who knows what’s going to happen?” Looney said.

Kwasi Kwarteng, the U.K.’s secretary of state for business and energy, said he welcomed BP’s decision.

“Russia’s unprovoked invasion of Ukraine must be a wake up call for British businesses with commercial interests in Putin’s Russia,” Kwarteng said in a tweet.

BP said it will take two non-cash charges in the first quarter to reflect the change, including an $11 billion charge for foreign exchange losses that have accumulated since 2013.

It is not clear exactly how BP will unwind its holdings, or who might step up to buy them.

Rosneft’s partnerships with Western oil and gas companies have been stymied before.

In 2011, Exxon Mobil, led at the time by future U.S. Secretary of State Rex Tillerson, signed a deal with Rosneft to potentially drill in the oil-rich Russian Arctic. But Exxon ended that partnership in 2017, citing U.S. and European sanctions against Russia.

Source: Voice of America

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EU to Finance Weapons Purchases For Ukraine, Ban Russian Media

The European Union plans to take the unprecedented step of funding weapons purchases for Ukraine, EU officials said on Feb. 27 as the bloc announced a raft of new sanctions in response to Russia’s invasion of Ukraine.

The EU’s plan to fund weapons purchases will use millions of euros to help buy air-defense systems, anti-tank weapons, ammunition and other military equipment for Ukraine’s armed forces. It would also supply things like fuel, protective gear, helmets and first-aid kits.

“For the first time ever, the European Union will finance the purchase and delivery of weapons and other equipment to a country that is under attack,” European Commission President Ursula von der Leyen said of the weapons purchases, calling it a “watershed moment.”

Von der Leyen expects the measure to be endorsed by EU leaders along with other significant moves — a ban on pro-Kremlin media outlets RT and Sputnik, the closure of EU airspace to Russian planes, and sanctions against Belarus.

She said RT and Sputnik are part of the “Kremlin’s media machine,” and the EU is “developing tools to ban their toxic and harmful disinformation in Europe,” von der Leyen said.

They will “no longer be able to spread their lies to justify Putin’s war and to sow division in our union,” von der Leyen said.

The closure of the EU’s airspace comes after many individual European countries along with Britain and Canada announced they would ban Russian planes. The EU airspace ban will prohibit flights into or over the EU by “every Russian plane — and that includes the private jets of oligarchs,” von der Leyen said.

The EU also will hit Russian ally Belarus with sanctions for facilitating the invasion. The regime of Belarusian strongman Alyaksandr Lukashenka had been “complicit in the vicious attack against Ukraine,” von der Leyen said.

New restrictive measures will hit Belarus’s most important sectors, including tobacco, wood, cement, iron and steel.

The measures come on top of EU sanctions announced Feb. 26, including cutting some Russian banks from the SWIFT interbank messaging network, banning all transactions with Russia’s central bank, and added restrictions on Russian oligarchs.

The measures also follow Germany’s decision to commit 100 billion euros ($113 billion) to a special armed forces fund and to keep its defense spending above 2% of GDP from now on.

Source: Voice of America