BP’s decision puts pressure on oil producers, despite soaring oil prices

(BFM Bourse) – BP prices fell more than 6% in London on Monday. At that time, the British oil group announced that it would withdraw from Russia due to the invasion of Ukraine after more than 30 years of presence. A fundamental decision that could cost him $ 25 billion and put pressure on other producers to do the same.

“Fundamental change”. For BP’s directors, Russia’s attack on Ukraine revolutionizes its involvement in Rosneft, one of Russia’s major oil producers and a major supplier of fuel to the Russian army. Bring. Under weekend pressure from both Labor opposition and conservative governments, the British sector giant will soon announce on Sunday that it will withdraw from the capital of Rosneft, which has a 19.75% capital since 2013. I decided to.

“Russia’s attack on Ukraine is an act of aggression with tragic consequences for the entire region. BP has been active in Russia for over 30 years and has worked with talented Russian colleagues. But this military action is It represents a fundamental change, which has resulted in BP’s board of directors engaging with the state-owned company Rosneft as a result of a thorough process. [russe], I can’t move on. BP representatives can no longer be allowed to sit on the board of directors of Rosneft. Rosneft’s shares are no longer in line with BP’s business and strategy, and it is now the Board’s decision to withdraw from BP’s shares in Rosneft. BP’s Board of Directors believes that these decisions will be in the best interests of all shareholders in the long run. “

“Like many others, I am deeply shocked and saddened by the situation in Ukraine. I am deeply saddened by everyone affected. Life in Rosneft. As a board member. The decision is that our immediate priority is to take care of the wonderful people in the region and we will do everything we can to support them, as well as how BP can do it. We are considering. We will support broader humanitarian efforts. ” The latter and Bob Dudley, two directors of Rosneft appointed by the British, immediately resigned from the board of directors of the Russian group.

In the near future, BP will put a heavy financial burden on itself, preparing to record the difference between the current fair price of the stock and the amount recorded on the balance sheet, about 14 billion euros and about 11 billion costs. doing. A dollar of foreign exchange loss that was previously shown on the balance sheet but not on the income statement. That’s certainly the total cost that could reach $ 25 billion without cash payments.

In addition, Rosneft’s profits, its production and its share of reserves are no longer integrated into the account, but will appear in another segment of results until an effective sale.

In this regard, BP’s price on the London Stock Exchange fell 6.57% to 353.65 pence on Monday morning, benefiting from a surge in Brent crude oil prices above $ 99 (+ 5.2%). I didn’t receive it.

However, BP’s fundamental choice sets a precedent and puts more pressure on other players, especially TotalEnergies. The price of the French group, which historically also existed in Russia, fell 6.65% at the same time to € 45.02. Directly and through PAONovatek’s 18.9% stake, Russia holds the largest share of natural gas production, especially in TotalEnergies. All production in Russia (gas and liquid, all millions of barrels of oil equivalent) accounts for about 10% of total production.

Guillaume Bayre-© 2022BFMBourse