Fossil fuel supermajor BP has posted underlying Q1 profits of nearly £5 billion, up 50% year on year, despite taking a £16 billion loss for bailing out of Rosneft, in protest at Putin’s assault on Ukraine.
At headline level, the leviathan posted this morning a £16.2 billion loss for the three months, reflecting £20.2 billion of costs related to dumping its 19.75% share in its sanctioned Russian partner in hydrocarbons.
The British concern’s steady-state profits for the quarter came in at a robust £ 4.93 billion, however, up from £3.26 billion a year earlier.
BP’s strong returns arose from what CEO Bernard Looney called ‘higher oil realisations’, ‘exceptional trading’, and stronger refining performance.
With rival Shell likely to post similar surging profits later this week, BP’s results today prompted Sir Kier Starmer to repeat on BBC Radio 4 Labour’s call for a windfall tax on North Sea operators. Conservative ministers rejected the call.
Within three days of Putin launching his invasion of Ukraine on 24 February, BP was the first oil major to anticipate sanctions, dropping its 30-year Russian involvement. Majors such as Exxon and Total followed later.
Before divestment, Rosneft accounted for around half of BP’s oil and gas reserves and a third of its production, the British company confirmed at that time. Its former partner’s name translates as “Russia’s oil”.
Rosneft is led by Igor Sechin, Putin’s long-time associate since the tyrant’s decade in the 1990s as deputy and fixer to Anatoly Sobchak, the mayor of Saint Petersburg who died mysteriously in 2000 just as Putin took over as Russia’s president.
People who need Putin
In Catherine Belton’s book ‘Putin’s People’, Igor Sechin is documented as a longtime KGB operative, rising from being Putin’s gatekeeper in the St Petersburg’s mayor’s office in the early 1990s, and appointed head of Rosneft in 2012. This year Sechin and former Chelsea FC owner Roman Abramovich were among seven oligarchs sanctioned by Britain on March 10.
Rising like Putin from a tough childhood in the former Leningrad, Sechin studied Portuguese and French at a KGB-approved institution, and spied under diplomatic cover in overseas postings in Mozambique and oil-rich Angola.
After Sechin allegedly orchestrated for Putin the ousting in 2003 of rebel tycooon Mikhail Khodorkvosky from control of Rosneft’s rival Yukos, Putin the following year appointed Sechin to Rosneft’s board.
The former diplomat and ex-KGB operative became its chair in 2012, thus achieving titular control of Russia’s prime source of foreign exchange earnings.
Drawing on extensive interviews with Putin associates, Catherine Belton researched and wrote her book over seven years, while serving a decade as the Financial Times’ Moscow bureau chief.
Three oligarchs including now sanctioned former Chelsea FC owner Roman Abramovich last year sued Belton and her publishers Harper Collins in English courts for alleged libel. Sechin was not among them.
In November 2021 the High Court largely exonerated the author and her book.