Bottom Line: Oil giant stuck in a hard place over sanctions against Sechin

Elizabeth Fournier
BP BOSS Bob Dudley is no stranger to Russian controversy. In 2008, when he was head of the oil giant’s Russian arm, he was forced to leave the country in unusual circumstances after his visa renewal was refused and officials raided the firm’s local TNK-BP offices.

Since he took over as chief executive of the whole shebang in the wake of the Gulf spill crisis, the Russians have never been far away. Most of 2011-12 was taken up with drawn out negotiations with Rosneft over TNK-BP, resulting in a complicated asset swap that landed Dudley with a 19.75 per cent stake in Rosneft, and a seat on the board (at a cost of almost £9bn).

And now the state-owned giant is looming large again, this time as a result of sanctions slapped on its chairman, Igor Sechin, by the US. Though no sanctions have been handed out on Rosneft itself, it’s got to make things awkward at board meetings including, presumably, the one that Dudley and Sechin attended together on Monday, shortly before sanctions were doled out.

Even if we take Dudley’s word that it’s business as usual, the Rosneft stake is hardly looking rosy as currency turmoil hit profits – a situation that’s unlikely to change in the near future.

Luckily, BP had plenty to keep shareholders sweet yesterday, including a dividend hike and promises that more share buybacks will be on the cards.

But they – along with Dudley himself – must be wondering just how long the Russian albatross is going to hang round BP’s neck.

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