Home Business oil giant BP decides to withdraw from Russia

oil giant BP decides to withdraw from Russia

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It is the first major Western company to withdraw from Russia. And not just any. The British oil company announced, Sunday evening February 27, that it was disengaging from the Russian group Rosneft, in which it holds a 19.75% stake, following “aggression” of Ukraine by Russia.

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“I was deeply shocked and saddened by the situation in Ukraine, and my sympathy goes out to all those affected. It forced us to fundamentally rethink BP’s relationship with Rosneft.”said BP chief executive Bernard Looney, who has resigned ” with immediate effect ” of the Russian company’s board of directors, as well as the other director appointed by BP, its former boss Bob Dudley.

A very high cost

According to FinancialTimes, the British government strongly pushed the group to take this decision, the financial consequences of which are significant. Rosneft accounts for about half of BP’s oil and gas reserves and a third of its production.

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The group “has been operating in Russia for more than thirty years”, rememberhe in his statement. The sale of its stake, valued at the end of 2021 at 14 billion dollars (12.5 billion euros), will entail costs of up to 25 billion dollars (22.4 billion euros), he says.

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BP is Rosneft’s second largest shareholder, behind the Russian state. The company is also listed in London, and its price lost more than 40% of its value during the first exchanges, Monday, February 28. BP fell, meanwhile, by about 6%.

The Norwegian public energy giant Equinor has also announced the end of its investments in Russia, which however represents only a very marginal part of its activities. It produces 25,000 barrels of oil equivalent per day (boe/d) in the country, for a total production of around 2 million boe/d. Equinor has been linked to Rosneft since 2012, as part of a partnership.

TotalEnergies is very present in Russia

But all eyes are now on Shell and especially TotalEnergies, two companies with a strong presence in Russia. The French group owns 19.4% of the gas giant Novatek and works with it on several fields, in which it also has stakes.

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In 2020, Russia accounted for 16.6% of TotalEnergies’ annual liquids and natural gas production. It thus owns 20% of Yamal LNG, a gigantic liquefied natural gas (LNG) project, operated by Novatek since 2017 and which cost 23 billion euros, entirely financed by Chinese and Russian banks.

Last December, the group led by Patrick Pouyanné also completed another giant Arctic LNG project, 600 kilometers north of the Arctic Circle, of which it will have 10% directly and 21.6% in total, including its share in Novatek. . Very criticized by France, which did not want to give its public guarantee, the round table was carried out in particular with the assistance of the Chinese oil companies CNOOC. Production should start in 2023, mainly to supply gas to Asia.

Russia, “It’s 3 to 5% of TotalEnergies’ revenues. We will manage », as when it was necessary for example to manage the stop in Yemen, explained Patrick Pouyanné, on February 24 during a conference in Paris where he was questioned on the possibility of a forced withdrawal. The acceleration of events in Ukraine could lead the group to take a decision very quickly.

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