Oil and gas supermajor BP (formerly British Petroleum) is divesting itself from Russian oil giant Rosneft amid sanctions over Moscow’s military operation in Ukraine, the company announced on Sunday. The move will reportedly cost the firm $25 billion.
“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,” BP Chief Executive Bernard Looney said, as cited by Reuters.
Rosneft accounts for nearly a half of BP’s oil and gas reserves and a third of its production. The UK company currently owns a 19.75% stake in Rosneft, and its divestment will result in a loss of up to $25 billion for BP, which did not specify how it plans to rid itself of its shares.
UK Business Secretary Kwasi Kwarteng welcomed BP’s announcement, calling on other businesses to follow suit.
“Russia’s unprovoked invasion of Ukraine must be a wake up call for British businesses with commercial interests in [President Vladimir] Putin’s Russia,” Kwarteng tweeted. Rosneft, however, said BP’s decision was made under “unprecedented political pressure.”
BP’s move follows wide-ranging measures taken by Western states to undermine Russia’s economy in retaliation for Moscow’s ‘demilitarization’ operation in Ukraine, which was launched last week and has been described by Kiev as “unprovoked” aggression.
The UK was among the first to condemn Russia’s actions, along with the US, EU, and Canada. The sanctions on Russia so far include the blocking of access to the SWIFT international payment system for some Russian banks, personal sanctions against prominent Russian individuals, a ban on semiconductor chip sales to Russia, and a number of other measures. BP is not the first to announce divestment from Russia. Norway’s prime minister on Sunday announced that the country’s sovereign wealth fund will divest all of its Russian assets in the coming days.
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