BP accused of conflict profiteering by Ukrainian official

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A significant vitality firm that pledged to promote its stake in Russia has but to take action, and a high Ukrainian official simply accused it of pocketing tens of millions from the conflict.

British Petroleum is among the world’s largest oil and fuel corporations, so when it introduced in February that it could promote its 19.75% stake in Russian vitality firm Rosneft within the wake of Vladimir Putin’s invasion of Ukraine, it held weight.

However 9 months later, BP has but to dump its stake, and considered one of Ukraine President Volodymyr Zelensky’s closest advisers is demanding the corporate lower ties instantly.

Oleg Ustenko, Zelensky’s chief financial adviser, penned a letter—seen by BBC and The Guardian—to BP CEO Bernard Looney urging the corporate to make good on its pledge from the conflict’s early days, whereas accusing BP of being complicit with Russia’s worldwide law-breaking and transgressions in Ukraine by holding on to its stake in Rosneft.

“After 9 months of Russian aggression, conflict crimes and the bombardment of civilian infrastructure, all funded and fuelled by Russian oil, fuel and coal, BP stays a shareholder in Rosneft,” Ustenko wrote. 

A BP spokesperson informed Fortune that the difficulties in promoting BP’s stake in Rosneft stemmed from issues associated to Western sanctions on Russian corporations.

Ustenko additionally accused BP of constant to obtain funds from Rosneft within the type of dividends, citing a current evaluation by non-governmental group World Witness. The evaluation claimed that, by failing to promote its stake in Rosneft, BP “continues to obtain revenue distributions to shareholders, often known as dividends,” from the Russian firm. 

Based mostly on a payout to Rosneft shareholders final month, World Witness estimated that BP pocketed round £580 million (round $713 million) for the primary 9 months of 2022.

The BP spokesperson mentioned the corporate has not obtained any dividends from Rosneft shares since February, and didn’t anticipate to obtain any in future, including that the choice to promote its Rosneft shares led to a $24 billion hit.

They added that any funds a Russian firm made to “unfriendly states” overseas could be strictly managed by the Russian authorities. 

However Ustenko claimed in his letter that BP’s lack of ability to promote its stake nonetheless makes it complicit in Rosneft’s huge earnings this yr, which have supported Russia’s conflict effort in Ukraine.

“BP will obtain this cash right into a restricted Russian checking account, a transparent indication of the historic mistake your organization has made—however all the identical, BP will obtain the dividend,” Ustenko wrote.

“No accounting mechanisms or statements from BP will change this reality. That is blood cash, pure and easy.”

Ustenko accused BP of “ready out the storm, returning to enterprise as standard when the conflict is over.”

The BP spokesperson denied this accusation, saying the corporate has “completely no intention of returning to ‘enterprise as standard.’”

All through the conflict, Russia has resorted to utilizing vitality as a weapon in opposition to the West, particularly Europe, which was depending on Russia for almost all of its oil and pure fuel provides. Regardless of sanctions, Russia has managed to proceed promoting vitality overseas this yr, profiting wildly off of extraordinarily excessive oil and fuel costs in the course of the first few months of the conflict.

Russian fossil gasoline exports earned Russian vitality corporations 158 billion euros ($166 billion) in the course of the first six months of the conflict, in accordance with a research by the Heart for Analysis on Vitality and Clear Air, a analysis group. Vitality revenues contributed roughly 43 billion euros ($45 billion) to Russia’s federal funds for the reason that begin of the conflict, the research discovered, serving to finance the conflict in Ukraine.

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