LONDON – Energy company BP said Tuesday that it remains committed to its investment in the Russian oil firm Rosneft, despite U.S. sanctions targeting its president, Igor Sechin, and sharp drops in income from its stake.
BP’s earnings from its 19 per cent stake in Rosneft have fallen sharply, mainly because of the drop in the value of the ruble against the dollar.
Its pre-tax replacement cost profit — an industry measure of earnings — fell to $271 million for the quarter ending in March, compared with $1.08 billion during the fourth quarter of last year. In the year-earlier quarter it had made $85 million, though that figure reflected only 11 days of production because the stake in the company had only recently been purchased.
Sechin has been president of Rosneft since the early 1990s. He is seen as the mastermind behind the 2003 legal assault on the private oil company Yukos, whose founder, Mikhail Khodorkovsky, who was later jailed following his disputes with the Kremlin. Rosneft seized the most lucrative elements of Yukos and it became Russia’s largest company.
BP made note of the sanctions with a very brief statement at the end of its earnings.
“It is too early to assess the impact on BP,” it said.
BP said net profit fell to $3.5 billion from $16.9 billion in the first quarter a year earlier. Underlying replacement cost profit fell about 24 per cent to $3.2 billion.