BP Plc (BP) shares slumped lower in pre-market trading Monday after Europe's second-largest oil company said it would dump its near 20% in Russian energy giant Rosneft following the Russian government's invasion of Ukraine.
The decision to effectively abandon one of the group's key assets, a 19.75% stake in Rosneft that comprises around half of its oil and gas reserves and a third of its overall production, will likely result in charges amounting to around $25 billion, BP said in a weekend statement.
Both current CEO Bernard Looney and former boss Bob Dudley will also step down from the Rosneft board, effective immediately, amid what it called a 'fundamental change' in the state-owned Rosneft following last week's invasion of Ukraine.
BP insisted, however, that that exit would result in no changes in its near-term financial targets, which include an compound earnings growth rate of between 7% and 9% over the next three years.
“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 said. "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."
"Our immediate priority is caring for our great people in the region and we will do our utmost to support them. We are also looking at how bp can support the wider humanitarian effort,” he added.
BP's U.S.-listed share were marked 7.2% lower in pre-market trading Monday to indicate an opening bell price of $28.52 each. Shares in London fell 5.76% to 356.80 pence each.
