BP shares in Kremlin oil firm are ‘blood money’, says Zelenskiy adviser

British oil giant had said it would ‘exit Russia’ but still owns nearly 20% of state-controlled fossil fuel firm Rosneft

The chief economic adviser to the Ukrainian president, Volodymyr Zelenskiy, has called on BP to exit Russia entirely after the fossil fuel firm was offered a £580m dividend by the oil giant Rosneft.

Oleg Ustenko has written to BP’s chief executive, Bernard Looney, to demand the British company cuts ties with the state-controlled Russian firm nine months after announcing its intention to leave the country.

BP has a 19.75% stake in Rosneft, one of the Kremlin’s most important oil assets. The FTSE 100 company vowed to end its shareholding in late February after Russia invaded Ukraine.

BP took a £18.7bn hit by writing off the shareholding from its books, but still owns the stock. Last month Rosneft’s boss, Igor Sechin, said the British company should reconsider that position and that it had put aside a dividend, in a Russian account, for BP.

In a letter to Looney, seen by the Guardian, Ustenko wrote: “BP was among the first of the oil majors to announce its intention to exit Russia by selling its stake in Rosneft, the Kremlin’s oil company.

“Yet after nine months of Russian aggression, war crimes and the bombardment of civilian infrastructure, all funded and fuelled by Russian oil, gas and coal, BP remains a shareholder in Rosneft.”

Ustenko cited Global Witness analysis that showed the dividend for the first nine months of 2022 was worth an estimated £580m, or the equivalent of a third of the UK’s direct aid to Ukraine this year.

“No accounting mechanisms or statements from BP will change this fact. This is blood money, pure and simple,” he said.

BP has not issued an update on its efforts to sell the stake in Rosneft, which has brought in £3.75bn in dividends since 2013. It could prove hard to sell as the west has sanctions on Russia and uncertainty over the regulation of the Russian oil industry may deter suitors from other countries.

Ustenko said there was “no evidence on which to judge BP’s claims that it is trying to exit Rosneft”. He told Looney: “Your condemnation of the war is welcome. Yet receipt of £580m of bloody Russian profits is completely unacceptable.

“Our position is clear – companies must leave Russia or risk complicity with Russia’s war crimes. Any European company which continues to profit from the Russian fossil fuel sector should establish a fund to dedicate that money to Ukrainian victims of the war.”

The Labour MP Margaret Hodge said: “Britain is trying to close down Russia’s oil market, yet BP is colluding with it. Any dividends going to BP should be repurposed by our government to help with the reconstruction of Ukraine.”

Ustenko has been working to put pressure on fossil fuel companies to sever ties with Russia to hurt the Kremlin’s coffers.

Despite efforts to curb Russian oil flows into Europe, it emerged last month that the country is now pumping almost as much as it did before the start of the war.

A BP spokesperson said: “BP is exiting Russia, we have no intention of returning to business as usual. Just three days after Russia’s attack on Ukraine, BP announced that we will exit our shareholding in Rosneft and other businesses in Russia – we said the attack was a fundamental change. This is still our position.”

BP said the decision had reduced its reported earnings by about $2bn a year and its oil and gas production by a third.

BP said it had not received any dividends since its decision and any payments to a UK company would go into “a highly restricted Russian bank account from which money could not be transferred without Russian government approval”. BP added that it had “no current expectation of receiving dividends from Rosneft”.

Separately, the BP rival TotalEnergies said it planned to cut its investment in the North Sea by 25% next year as a result of the toughened windfall tax on oil and gas producers.

Total’s UK country chairman, Jean-Luc Guiziou, told Energy Voice that it was assessing the impact of “another change to the fiscal environment for energy investors in the UK” and the shelved investment equated to £100m for next year alone.

Contributor

Alex Lawson Energy correspondent

The GuardianTramp

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