OIL GIANT BP yesterday reiterated its commitment to Rosneft, despite the US putting sanctions on its head earlier this week.
The FTSE 100 firm owns an almost 20 per cent stake in the Russian oil producer, whose chief executive Igor Sechin is one of president Vladimir Putin’s oldest allies.
Russia has been at loggerheads with the West over the sovereignty of the Crimea region in Ukraine.
In the first quarter BP’s profits from Rosneft shrank by 75 per cent, due to the weakening rouble amid the Ukraine crisis.
It also had a tougher comparison due to the absence of a tax charge in the previous period.
“We will of course comply with any of the relevant sanctions and look at the situation very closely,” said chief executive Bob Dudley.
He said that he would still attend Rosneft board meetings – “Rosneft itself has not been sanctioned” – and refused to speculate on whether BP would need to divest its stake if the situation worsened.
“Our commitment to Rosneft is a long term one. Our relationship continues to grow and we continue to believe it will have significant benefits for Rosneft and BP,” Dudley told analysts.
BP raised its dividend by 8.3 per cent in the first quarter, although it reported a 24 per cent drop in profit to $3.2bn (£1.9bn), slightly ahead of market expectations of $3.1bn.
It attributed the decline in earnings to a challenging refining market and lower production, due to divestment of assets and the expiry of an onshore concession in Abu Dhabi in January. The company also made a $521m write-off relating to a shale project in the US that it has decided not to proceed with.
BP said losses from the Gulf of Mexico oil spill now total $42.7bn, not including business loss claims that it is still contesting.
Shares closed up 2.92 per cent.