BP to ‘exit’ its 20% stake in Russian oil company Rosneft

British oil company BP said Sunday that it would “exit” its nearly 20% stake in Rosneft, the Russian state-controlled oil company. BP also said that both its CEO, Bernard Looney, and his predecessor, Bob Dudley, would resign their seats on the Rosneft board.

The London-based oil giant has worked in Russia for more than 30 years, but the invasion of Ukraine led the company to conclude that its involvement with Rosneft “simply cannot continue,” BP’s chair, Helge Lund, said in a statement Sunday.

BP came under pressure in recent days from both the British government and opposition lawmakers over the Rosneft stake. Prime Minister Boris Johnson has taken a hard line against the Russian invasion, arguing strongly that Europe needs to rapidly reduce its dependence on imports of natural gas from Russia.

In these circumstances, BP’s large holding in Rosneft looked increasingly untenable.

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It was not clear how BP would accomplish its exit from Rosneft. A BP spokesperson said the company would begin the process of disposing of its stake but did not yet know how it would accomplish that. The market for Rosneft shares is unlikely to be strong at the moment, although the company is one of the world’s largest oil producers.

The board resignations will lead to accounting changes at BP. The company will no longer book its share of Rosneft’s profits ($2.4 billion last year) and reserves (about 50% of BP’s holdings). BP received $600 million in dividends from Rosneft last year and would have been expected to receive more this year because of higher oil prices.

BP also said it would write off at least $11 billion in the first quarter of 2022 related to the Rosneft holding.

BP’s exit from Rosneft, once accomplished, will draw at least a temporary line on BP’s long experiment with Russia, which began early this century with the company forming a joint venture called TNK-BP with a group of Russian oligarchs.

After a decade of stormy relations among the partners, BP sold its stake in the joint venture to Rosneft in 2013 for $12.5 billion in cash plus the 19.75% stake in Rosneft.