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BP To Exit Shareholding In Rosneft

BP plc (BP,BP.L), on Monday, said that it would exit its 19.75% shareholding in Rosneft. Also, the company announced resignation of its chief executive officer Bernard Looney from the board of Rosneft with immediate effect.

The other Rosneft director nominated by bp, former bp group chief executive Bob Dudley, is similarly resigning from the board, the company stated.

bp chair Helge Lund said, "Russia's attack on Ukraine is an act of aggression which is having tragic consequences across the region. 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..."

The resignations would results in two material changes to bp's financial reporting and finances in the results for the first quarter of 2022.

First, it is expected to give rise to a non-cash adjusting item charge at the time of the first quarter 2022 results, and Second, the change is expected to result in non-cash adjusting item charge, principally arising from foreign exchange losses accumulated since 2013 that under IFRS were previously recorded directly in equity rather than the income statement.

As a result of the accounting changes, and excluding Rosneft from base year and future periods, bp now expects to continue, as before, to deliver a 7%-9% EBIDA per share CAGR between 2H19/1H20 through 2025 at oil prices of $50-60 per barrel (2020 real) based on bp's planning assumptions; and EBITDA from resilient hydrocarbons and group to be around $2 billion lower in 2025, at around $31 billion and $38 billion respectively.

As bp now is exiting its interest in Rosneft, it has removed Rosneft dividend payments from its financial frame. Further, bp noted that it will also exit its other businesses with Rosneft within Russia.

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