With $16 billion in investments in Russia, BP is in a precarious position as the ruble crashes due to falling oil prices and international sanctions over the conflict in Ukraine.
BP “is the biggest foreign investor in Russia through its 20% stake in OAO Rosneft, the state-controlled oil giant,” the Bloomberg reports. BP relies on the partnership for one-third of its production and nearly 20% of its profit.
“By cutting Rosneft off from lenders in the United States and the EU and throwing the ruble into a tailspin, sanctions have hit both BP and its Russian partner,” Bloomberg notes. “Although Rosneft shares tumbled even before the oil price fall, the stock has tanked further, sinking 52% in dollar terms. BP has lost $9.1 billion on the value of its Rosneft shares since acquiring its stake in March 2013.”
Meanwhile, BP may be liable for up to $18 billion in penalties, on top of the $28 billion in damages it has already paid out in connection with the 2010 Deepwater Horizon disaster in the Gulf of Mexico.
