Against the backdrop of Russia's military operation against Ukraine, the largest Russian oil company Rosneft began to lose strategic partners. British BP, the second largest shareholder of Rosneft, announced the termination of cooperation. BP intends to sell its 19.75% stake in Rosneft with a current value of $11.5 billion, which it has owned since 2013, and also withdraw from all joint projects. Top managers of BP also left the board of directors of Rosneft.

British BP on February 27 announced its withdrawal from the capital of Rosneft. BP owns a 19.75% stake in the Russian oil company, it estimated their book value at $14 billion at the end of last year. Who will buy the stake and how the deal will be carried out in the face of severe sanctions on most Russian banks, the message does not indicate. The second largest minority stake in Rosneft after BP belongs to the Qatari QIA (18.46%).

The British oil company links its decision to Russia's military operation in Ukraine. This week, British Energy Minister Kwasi Kwarteng discussed with the head of BP participation in Rosneft in the context of the situation in Ukraine.

Rosneft noted that BP management warned the company in advance of its intention to sell its stake and leave the joint venture.

According to Rosneft, this decision was the result of "unprecedented political pressure." The Russian company also felt that "given the role of Rosneft for BP, we can conclude that the political situation was used to damage BP and reduce competitiveness." Rosneft added that they remain open for cooperation.

Both representatives of BP on the board of directors of Rosneft - the head of the company Bernard Looney and its former head Robert Dudley - immediately left the board. In addition, BP announced its intention to withdraw from joint ventures with Rosneft in Russia. BP now owns 49% in the exploration JV Yermakneftegaz and the Kharampurneftegaz gas project, as well as 20% in Taas-Yuryakh, which is developing the Srednebotuobinskoye field. The total book value of these assets is estimated at $ 1.4 billion. BP also discussed the purchase of gas by Rosneft, which has been seeking the right to export this raw material for several years.

BP Chairman Helge Lund called Russia's actions against Ukraine "an act of aggression" and said that participation in Rosneft "is no longer connected with the business and strategy of BP." “The BP Board of Directors believes that these decisions are in the long-term interests of all of our shareholders,” he stressed. “Like many others, I was deeply shocked and saddened by the situation unfolding in Ukraine, and I sympathize with all of my heart to all those affected. This forced us to radically rethink our position towards Rosneft,” added Bernard Looney. Also, Mr. Looney is leaving the Board of Trustees of the Russian Geographical Society.

The deal from a financial point of view looks extremely painful for BP.

Thus, the current market value of BP's stake in Rosneft, based on quotations on the Moscow Exchange as of February 25, is about $11.5 billion. may amount to $25 billion in Q1 results in May. Probably, we are talking about non-cash write-offs associated with a decrease in BP's reserves, since it will no longer take into account Rosneft's reserves in its reporting.

BP became the largest minority shareholder of Rosneft in 2013 as a result of a deal in which Rosneft bought TNK-BP, where the British company owned a 50% stake.

BP is the first major foreign oil company to decide to exit its Russian assets as a result of the events in Ukraine. Sanctions have already affected Rosneft's partnership with strategic partners, but all of them, in one way or another, sought to continue working. For example, the American ExxonMobil withdrew from the joint venture with Rosneft on the Arctic shelf only four years after the imposition of sanctions that banned such work. Now among the Western partners of Rosneft on projects in the Russian Federation are Exxon (Sakhalin-1), Norwegian Equinor (Sevkomneftegaz and Angaraneft), Italian Eni (projects on the Arctic shelf).