BP slides as Russia exit plan may result in $25 billion bill -Breaking
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© Reuters. The BP logo was seen at a St. Petersburg fuel station belonging to British oil company BP on October 18, 2012. REUTERS/Alexander Demianchuk/Files(Reuters:) Shares in BP fell almost 7% Monday, after the British energy giant announced that it would sell nearly 20% of its Russian oil giant Rosneft shares over the weekend in response to Moscow’s invasion.
Rosneft is a state-owned oil and natural gas company which accounts for about half of BP’s reserves and a quarter of its production. BP announced on Sunday that the sale of the 19.75% stake will end three decades-long partnership between the companies. It could lead to charges up to $25 Billion.
BP shares suffered some losses in the early stages and fell 4.5% to 361.5 pennies on the London Stock Exchange at 0825 GMT. But they were still the largest losers of Britain’s blue chip.
BP is Russia’s largest foreign investor. Its dramatic exit highlights other Western companies that have operations in Russia amid an escalating conflict between Moscow and the West.
BP, which is home to around 200 Russian employees, stated that the latest decision would have no impact on short- and medium-term financial targets. However, it said its new move would also not alter its commitment to low-carbon fuels or renewable energy.
After Rosneft exit, the company will be required to pay $11 million in foreign currency non-cash charges. BP will not include these costs in its financial statements. BP also stated it expects a non-cash fee of as high as $14 billion to cover the Rosneft “carrying price”.
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