New Delhi, April 7
Despite oil giant British Petroleum's high-profile announcement that it would exit its shareholding in Russia's state Rosneft and its joint operations there, the UK supermajor does not seem to be quickly winding down operations, sources tell Energy Intelligence, and neither are its Western peers.
BP has not initiated any procedures to withdraw either from its interest in the charter capital of Rosneft or from the shareholding in the pair's joint ventures, according to sources close to Rosneft shareholders.
"BP remains a shareholder in Rosneft and continues to interact with its Russian partners within the framework of the acting shareholder agreement," a source noted.
In a written response, BP reiterated its February 27 press release, saying it will exit its shareholding in Rosneft. "We are pursuing that and we don't have an update."
The international major also reiterated that "the two BP-nominated directors on the Rosneft board are resigning, with immediate effect from Feb. 27."
Those are BP's current and former CEOs, Bernard Looney and Bob Dudley.
However, both are still named as Rosneft's directors on the company's website.
Sources in Russia told Energy Intelligence they wouldn't be surprised if BP proposes candidates — possibly with Russian passports — to stand for election to Rosneft's board at the annual shareholder meeting in June. The list of new candidates must be approved by May.
Joint Ventures and Oil Purchases
BP has also continued to engage with Rosneft on certain joint operations.
In addition to the Rosneft stake, BP has interests in three joint ventures with Rosneft: 20 per cent in Taas-Yurakh Neftegasdobycha, 49 per cent in Kharampurneftegas and 49 per cent in Yermak Neftegas.
BP's Russian subsidiary, BP Russian Investment Ltd., notified Rosneft on March 11 about the removal of its previously nominated member to the Kharampurneftegas board of directors, Stephen Raymer.
But BP replaced him with another BP nominee in Afgan Huseynov.
BP declined to comment on the change of its Kharampurneftegas director when approached by Energy Intelligence.
However, in its written statement to Energy Intelligence, BP reiterated that it "will also exit our other businesses with Rosneft in Russia — this includes the three joint ventures".
According to sources, BP continues to buy Russian oil volumes but is "sticking to its contractual obligations" and is not picking up spot cargoes.
In its statement to Energy Intelligence, BP repeated that "we will not enter into any new contracts for Russian oil and gas with Russian companies." And BP will "of course continue to comply with all sanctions and restrictions."
Wait and See
This stance leaves Rosneft unclear about when BP is going to undertake any actions to divest their Russian assets.
Such sales would be complicated right now by sanctions by the West and counter-sanctions put in place by Moscow.
The Russian government banned the sale of Russian securities by foreigners to give them time to reconsider their decisions, which Moscow believes have been taken under political pressure.
But the sale of stakes in Russian companies is still possible with a permission of a special governmental commission.
Sources indicated other international majors, including Exxon Mobil, Shell and Equinor, have also been slow to act.
Following their statements, no practical steps have been taken by them to withdraw from existing projects in Russia, sources said.
"Interaction has terminated on new projects, while on the old ones, work is being carried out in a regular way," a source close to Rosneft says.
The Russian major supports such "a weighed behaviour," the source indicated, as it remains open to continuing relationships with Western firms that have stretched back decades.
