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 Russia and the West are in a stand-off over Ukraine that is
reminiscent of the Cold War. In the last few days, tensions have
risen in the mainly Russian-speaking eastern part of Ukraine.
Britain's BP is one of the most exposed oil majors to Russia through
its stake of just under 20 percent in the Kremlin's state oil
champion Rosneft <ROSN.MM>, the world's largest listed oil producer
by output volumes.
"We will seek to pursue our business activities mindful that the
mutual dependency between Russia as an energy supplier and Europe as
an energy consumer has been an important source of security and
engagement for both parties for many decades," Chief Executive Bob
Dudley said.
"That has got to continue and I think we play an important role as a
bridge," he told the annual shareholders' meeting.
The United States and European Union have imposed visa bans and
asset freezes against Russian and Ukrainian individuals in response
to Moscow's annexation of Crimea.
They have said they are willing, if necessary, to levy a further
round of sanctions aimed at key sectors of the Russian economy such
as energy, banking and mining.
On Thursday, questions about Russia dominated the shareholders'
meeting overshadowing other usually topical issues such as
executives' pay or the ongoing settlement with businesses and
individuals suing over the massive 2010 Gulf of Mexico oil spill.
Two shareholders asked Dudley what he would do if Russian President
Vladimir Putin decided "to annex BP's position in Rosneft". Another
asked why BP was investing in Russia and what it was telling about
its investments to the UK foreign office.
Mike Everett, governance director at Standard Life Investments,
which holds over 253 million shares in BP on behalf of its clients,
sought clarifications on BP's statements that it maintains
"significant influence" over operations at Rosneft.
"Other than Mr Dudley's position on the Board of Rosneft could you
give some concrete examples of the 'significant influence' you have
over its operations?" said Everett.
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TALKING TO POLITICAL LEADERS
Dudley said BP was having discussions with Rosneft about staffing
and engineering.
"None of us know what can happen in Ukraine," he said while adding
Europe and Russia were so interdependent on energy supplies that
"neither side can just turn this off".
Russia provides over a quarter of BP's oil output worldwide and more
than a third of its oil and gas reserves.
Dudley said last month the company "absolutely" stands by its
investments in the country.
BP's chairman Carl-Henric Svanberg said investors should not
over-estimate BP's exposure to Russia as the firm has comparable
investments of $15 billion in Azerbaijan and Angola and all of those
are dwarfed by investments in the United States.
He also said he saw no risk of asset expropriation: "Ideas of
expropriation will hit them (Russia) dramatically. I can't see why
that should happen".
"We are in close contacts with political leaders in different parts
of the world, and of course here in the UK," said Svanberg.
Dudley, a U.S. citizen, had strained relations with Russian
officials during his time as an oil executive in Moscow.
He was forced to flee the country, saying he feared for his security
during a 2008 dispute between BP and a group of Russian oligarchs
over corporate governance at TNK-BP, where he was then chief
executive.
TNK-BP was ultimately sold to Rosneft for $55 billion last year,
giving BP a stake in Rosneft.
(Writing by Dmitry Zhdannikov; editing by Elaine Hardcastle)
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