Bps bernard looney is on a mission to reduce group hydrocarbon production simply not in russia. bp reveals no sign of giving up its 19.75 percent holding in rosneft, the state-owned russian oil business. mr looney has actually cloaked himself in crowd-pleasing green guidelines since using the top task at bp. but the former head of gas and oil exploration and manufacturing (upstream) keeps their nose for the sulphurous black things.

At 1.1m drums each day, rosneft signifies very nearly a third of bps total result of oil and natural gas. the russian team has actually delivered almost $2bn of dividends to bp shareholders since 2017.

That earnings stream could fade away offered rosnefts lack of profits up to now this year, as uncovered because of the state oil producers third-quarter outcomes on friday. rosneft bases its dividend payout on a percentage of the web profits. experts forecast that rosneft will report the full 12 months reduction.

Undoubtedly mr looney really wants to make great on plans to cut bps result by 40 % to 1.5m b/d in 2030 (excluding rosneft). in that case, russian production will develop in relative percentage inside the group. rosneft's views including disagreeing with bps upstream strategy will hold more excess weight. russian manufacturing cannot be left within the footnotes, whilst has-been on a lot of pages of bp trader presentations.

If bp did sell it might struggle to discover purchasers rapidly for about $10bn of shares. but nevertheless after any taxes the stake would probably protect a couple of years of dividends, or a share buyback of roughly one fourth of bps outstanding stock. either way, given that bps share cost features above halved within the last two years, that latent russian asset price must look increasingly attractive.

Mr looney may wish to hold their options available in just one of the worlds largest oil exploration zones. but bps commitment to rosneft tends to make less sense (and cents) each year.

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