Two massive players in the petroleum goods market out of the United Kingdom have recently put out announcements stating that they are now planning to cut all partnerships with the various Russian oil companies due to the Russian invasion of Ukraine.
The first of these giants, British Petroleum, put forth their announcement on Sunday that stated that it was divesting from Rosneft, the state-run oil giant in Russia. BP has historically had a close to 20% stack in Rosneft ever since 2013, and both Bernard Looney, the CEO of BP, and former CEO Bob Dudley held seats on the board of directors for Rosneft. Along with the pledge to sever its financial ties, Looney, who has held a seat on the board for Rosneft since early 2020, and Dudley, who has held their seat since back in 2013, both plan to tender their resignations from the board.
“Russia’s attack on Ukraine is an act of aggression which is having tragic consequences across the region,” claimed BP chair Helge Lund in a release. “[BP] has operated in Russia for over 30 years, working with brilliant Russian colleagues. However, this military action represents a fundamental change. It has led the [BP] board to conclude, after a thorough process, that our involvement with Rosneft, a state-owned enterprise, simply cannot continue. We can no longer support [BP] representatives holding a role on the Rosneft board. The Rosneft holding is no longer aligned with [BP’s] business and strategy and it is now the board’s decision to exit [BP’s] shareholding in Rosneft. The [BP] board believes these decisions are in the best long-term interests of all our shareholders.”
“Like so many, I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected,” continued Looney. “It has caused us to fundamentally rethink [BP’s] position with Rosneft. I am convinced that the decisions we have taken as a board are not only the right thing to do, but are also in the long-term interests of [BP].” Looney went on to add that the company would be doing its “utmost” to help the various humanitarian aid programs across the area.
This announcement from BP was quickly chased by the second British oil giant, Shell, which announced this past Monday that it planned to discontinue its partnership and ventures with Gazprom, a Russian oil company. Shell has, in the past, held roughly 27.5% stake in a Russian refinery that produces liquified natural gas, and an almost 50% stake in two other Russian petroleum and energy development ventures. Shell was also part of the construction of the Nord Stream 2 pipeline.
“We are shocked by the loss of life in Ukraine, which we deplore, resulting from a senseless act of military aggression which threatens European security,” stated Ben van Beurden, the CEO of Shell, in a release. “Our decision to exit is one we take with conviction. We cannot – and we will not – stand by. Our immediate focus is the safety of our people in Ukraine and supporting our people in Russia. In discussion with governments around the world, we will also work through the detailed business implications, including the importance of secure energy supplies to Europe and other markets, in compliance with relevant sanctions.”