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○ With little chance of a rich offer, exiting Russia could cost BP its entire investment

- James E. Ellis

On Feb. 8, after delivering the highest quarterly profit in a decade, BP Plc Chief Executive Officer Bernard Looney offered a strong defense of the company’s deep ties with Russia’s largest oil producer. Russian tanks had not yet crossed into Ukraine, but with 130,000 troops at the country’s borders, tensions were quickly rising, and BP’s 20% stake in Kremlin-backed Rosneft PJSC meant the London-based oil giant had a lot at stake.

Wearing a V-neck sweater, plain white shirt, and no tie, Looney in a television interview offered a simple rationale for continuing operations in Russia: “Our job is to focus on the business of business. We avoid the politics.”

A little more than two weeks later, the politics became unavoidable. And as the reality of Russia’s unprovoked invasion in the early hours of Feb. 24 sunk in, BP executives quickly realized they needed to end the company’s relationship with Rosneft, the fruit of 30 years of investment in Russia.

The day after the invasion, BP’s board gathered— some in person, some virtually—at its London headquarters. At 5 p.m. executives including Looney dialed into an emergency meeting with U.K. Business Secretary Kwasi Kwarteng, who made it clear that the government wanted them to end the Rosneft relationship.

“The world tends to look very different after one has an invasion of a neighboring country,” says Jonathan Elkind, a senior research scholar at the Center on Global Energy Policy and a former official in the U.S. Department of Energy.