Donate ‘wartime profits’ to Ukraine or pay windfall tax, MPs tell BP

The company, which still owns stock in Russian oil, is being pressured to sever all ties with the country

BP should donate its “wartime profits” in Russia to the reconstruction of Ukraine or ministers should impose a special windfall tax on the oil company to force it to do so, MPs have told parliament.

The British oil supermajor has a 19.75% stake in Rosneft, one of the Kremlin’s most important oil assets and signalled its intent to exit Russia nine months ago, after Russia invaded Ukraine.

The company took a £18.7bn hit by writing off the shareholding from its books, but still owns the stock in the Russian state-controlled firm.

In a parliamentary debate on Wednesday, MPs from all parties put pressure on the government to ensure BP completely left the country.

An analysis by Global Witness shows that a dividend Rosneft has offered BP is worth an estimated £580m, or the equivalent of a third of the UK’s direct aid to Ukraine this year.

The Labour MP Dame Margaret Hodge, who raised an urgent question on the matter, told the Commons on Wednesday: “It is utterly shameful that a large, publicly listed British company profits from the sale of oil that is funding Putin’s war.

“BP must either voluntarily donate the entirety of its Russian dividends to the reconstruction of Ukraine, or the government must take action to force them to do so.”

The Guardian revealed last week that Oleg Ustenko, the chief economic adviser to the Ukrainian president, Volodymyr Zelenskiy, has written to BP’s chief executive, Bernard Looney, to demand it cuts ties with Rosneft.

Hodge said: “BP’s claim that it is locked in as a shareholder is both laughable and easily solved. They should heed calls by Zelenskiy’s chief economic adviser and give up their wartime profits to the reconstruction of Ukraine and victims of the war.”

On behalf of the government, James Cartlidge, exchequer secretary to the Treasury, said: “The government does not comment on individual commercial decisions and the process of divesting from Russia will be complicated for companies who need to ensure compliance with financial sanctions.”

The Conservative MP Julian Lewis said: “What we’re looking for here is a way of government being able to intervene to stop private companies somehow drilling a hole in the bottom of the bucket while we are pouring in water at the top.

“Is there nothing really that can be done to impound or confiscate or levy a tax against money that has been raised in this unacceptable way?”

Cartlidge said £18.4bn worth of assets had been frozen as part of the UK’s sanctions regime following Russia’s invasion of Ukraine. He said the government wanted to see divestment and “support companies in taking action”, adding: “I’m happy to look at what further can be done in this space.”

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.

BP said last week 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”.

Many UK businesses exited their Russian operations at the start of the war, however, a clutch of British firms remain for various reasons, including GlaxoSmithKline, Glencore and British American Tobacco.

Separately, it is understood that oil and gas firms will meet with the chancellor, Jeremy Hunt, in Aberdeen on Friday. Hunt hit fossil fuel firms with a toughened windfall tax on North Sea operators last month, as well as a levy on electricity generators.


Alex Lawson Energy correspondent

The GuardianTramp

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