Two Global Oil Titans Announce Divestment From Russia Over Ukraine Invasion

Two United Kingdom-based global petroleum giants have announced that they will be ending partnerships with Russian oil companies in response to the Russian invasion of Ukraine.

British Petroleum first announced Sunday that it was divesting from state-controlled Russian oil giant Rosneft. BP has had nearly a 20% stake in Rosneft since 2013, and both current BP CEO Bernard Looney and former CEO Bob Dudley served on Rosneft’s board of directors. In addition to severing its financial ties, Looney, who has been on the board of Rosneft since 2020, and Dudley, who has been on the board since 2013, will both resign from their positions.

“Russia’s attack on Ukraine is an act of aggression which is having tragic consequences across the region,” BP chair Helge Lund said in a statement. “[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,” Looney added. “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 added that the company would be doing its “utmost” to support humanitarian aid in the region.

BP’s announcement was followed by British oil giant Shell announcing Monday that it would discontinue its joint ventures with Russian oil company Gazprom. Shell had previously owned a 27.5 percent stake in a Russian facility producing liquified natural gas, and a 50% stake in two Russian petroleum and energy development ventures. Shell was also involved in 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,” Shell CEO Ben van Beurden said in a statement. “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.”

The companies’ moves to divest from Russia come amid mounting concerns about the impact of global sanctions and the Ukraine conflict on the global energy supply. The standard price of oil briefly crossed the $100 per barrel mark in the U.S. last week, while the global price standard rose briefly to $105 per barrel, in the immediate wake of Russia’s invasion of Ukraine.

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