4

Yesterday, BP announced they would be selling their $14 billion share in Rosnef.

The London-headquartered oil firm announced on Sunday that it was offloading its 19.75% voting stake in Rosneft, noting that Russia’s invasion of Ukraine represented a “fundamental change” in relations with Moscow.

The value of the stake was estimated at $14bn (£10.4bn) at the end of last year. It is unclear who BP would sell it to.

The oil firm’s chief executive, Bernard Looney, is also resigning from the Rosneft board with “immediate effect”, it said in a statement.

Former BP chief executive Bob Dudley has also resigned from the Rosneft board, which is chaired by the former German chancellor, Gerhard Schröder, and run by Igor Sechin, a close ally of the Russian president, Vladimir Putin.

Today however, Russia announced that

Russia's central bank says it has ordered brokers to suspend the execution of all orders by foreign legal entities and persons who want to sell off their Russian investments, such as stocks and shares.

So it seem the Russian move is directly aimed at stopping Western companies from divestitures from Russia.

For slightly more background, according to Wikipedia, Rosneft is "the second-largest state-controlled company (after Gazprom) in Russia in terms of revenue".

My question is whether the move is effective in blocking BP's sale or if those shares are held/traded on a different market, not Moscow.

Improve this question

1 Answer 1

Reset to default
1

Yes they can.

The restriction applies to brokers, but not transfer agents, who work with brokers. BP can sell their stock to someone else, or back to Rosneft, directly through Rosneft's transfer agent, bypassing the brokers.

The only other question is - will Rosneft require BP to conduct the transaction in rubles.

Improve this answer
3
  • Have there been other direct sales (like that) of major Western firms' shares since the new measures have been put in place, to confirm this (direct sale) is more than just a theoretical possibility? (Aside, it seems some Indian firms might be interested in buying BP's share. So that makes your answer more likely true. But they still seem to need some kind of regulatory approval.)
    – Fizz
    Sep 1, 2022 at 14:54
  • ... which the Indians seem to be saying that the Russians aren't in a hurry to give. "Russia hasn’t been amenable to overtures by Indian state-run firms in acquiring the stakes of Western energy majors in Russian oil and gas assets after their exit from the sanctions-hit nation, said a top Indian government official aware of ongoing deliberations."
    – Fizz
    Sep 1, 2022 at 14:59
  • Rosneft can't require that BP use a currency for the transaction but they can control what they currency they use for any offers they make. My guess is the expected currency will be the currency it is listed under on the exchange. If the listed currency is Rubles then Rosneft will likely offer in Rubles. However that doesn't mean selling it to someone else will mean it happens in Rubles.
    – Joe W
    Sep 1, 2022 at 15:02

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .