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BP plunges deep into red on pullout from Russia

LONDON (AFP) – British energy giant BP said yesterday that its decision to pull out of Russia as a result of the conflict in Ukraine pushed it deep into the red in the first three months of this year.

BP said in a statement it booked net loss of USD20.4 billion in the period from January to March compared with a bottom-line profit of USD4.7 billion a year earlier.

The huge loss was attributable to the group’s decision in February to pull its 19.75-per-cent stake in energy group Rosneft, ending more than three decades of investment in Russia, BP said.

“Our decision… to exit our shareholding in Rosneft resulted in the material non-cash charges and headline loss,” BP Chief Executive Bernard Looney said in a statement.

BP said the charges connected to the break with Rosneft amounted to USD25.5 billion before tax.

That wiped out the positive effect of rising energy prices, driven by concerns of tight supplies following the invasion by major oil and gas producer Russia, the group said.

Vehicles fill up at a BP petrol station in Tonbridge, south east of London. PHOTO: AFP

First-quarter revenues jumped by 40 per cent to USD51 billion.

“In a quarter dominated by the tragic events in Ukraine and volatility in energy markets, BP’s focus has been on supplying the reliable energy our customers need,” Looney said.

On Monday, the European Union (EU) had warned member states to prepare for a possible complete breakdown in gas supplies from Russia, insisting it would not cede to Moscow’s demand that imports be paid for in rubles.

Despite the massive first-quarter loss, BP’s share price jumped by 1.9 per cent to GBP3.99 in early trading on London’s FTSE 100 index, which was down overall.

CMC Markets United Kingdom (UK) analyst Michael Hewson attributed the share’s strong performance to an announcement that BP will buy back another USD2.5 billion in shares, and further reduce its net debt.

BP also announced plans to invest up to GBP18 billion (USD22.5 billion) in green and fossil fuel operations in the UK by the end of the decade.

While Looney said BP was “fully committed to the UK’s energy transition” to net zero, the company “intends to continue investing in North Sea oil and gas” amid Britain’s near-term energy security needs in the wake of the Ukraine war.

“We’re backing Britain,” Looney said. “It’s been our home for over 110 years, and we’ve been investing in North Sea oil and gas for more than 50 years.”

In the North Sea, BP plans to develop “lower emission oil and gas projects to support near term security of supply”.

The company has also proposed new offshore wind projects and plans for hydrogen produc-
tion facilities.