BP: From Russia with Love

Suzie Neuwirth

Many of the shareholder questions at BP’s annual meeting today were on the topic of Russia, Ukraine and the oil major’s stake in Rosneft.

The FTSE 100 firm is particularly exposed to the ongoing tensions between Ukraine and Russia over the sovereignty of Crimea, due to its near 20 per cent stake in the Russian state-owned oil company.

The party line seems to be that BP investors have nothing to worry about; chief executive Bob Dudley said things at Rosneft are “business as usual” and that BP can act as a “bridge” between Russia and the West.

The political tensions have sparked fears of an energy shortage in Europe, as the continent gets one third of its gas from Russia, much of it via Ukraine.

But Dudley is not worried: “Europe and Russia are integrally linked”, he said, adding that neither side could afford to sever the gas supply agreement.

Very bullish coming from a man who famously had to flee Russia in 2008, following a dispute over corporate governance at its former joint venture TNK-BP.

There was also a sense that BP was playing down the significance of Russian risk to its overall portfolio.

Chairman Carl-Henric Svanberg said that BP has $15bn (£9bn) invested in Rosneft, but this is the same as its investment in Azerbaijan. More than the Shah Deniz gas pipeline, equal to Angola and far less than the US.

But who can blame BP for keeping Russia sweet when its relationship with the US has soured since Deepwater Horizon?