BP books $25.5 billion in impairments on Russian exit

BP PLC reported a $ 25.5 billion deterioration on Tuesday after the decision to leave its 19.75% stake in Russian company Rosneft Oil Co.

These ineffective charges included $ 24 billion in Rosneft’s share capital and $ 1.5 billion related to BP’s BP.
+ 0.49%

+ 3.18%
other business with Rosneft in Russia.

As a result, the UK energy company posted a net loss of $ 20.38 billion in the first quarter of the year, compared to a profit of $ 2.37 billion in the fourth quarter of 2021.

“Our decision in February to leave our stake in Rosneft resulted in significant non-cash expenses and the general loss we reported today. But it has not changed our strategy, our financial framework or our distribution expectations. to shareholders, “said Bernard Looney, CEO. As part of Rosneft’s departure, Mr. Looney resigned from the Russian company’s board in February.

The underlying replacement cost benefit, the company’s preferred metric, rose to $ 6.25 billion in the first quarter from $ 4.07 billion, reflecting exceptional commercial gains in oil and gas, higher oil earnings and a result of stronger refining. That was above the $ 4.49 billion market consensus compiled by BP and an average of 26 brokers.

Operating cash flow increased to $ 8.22 billion from $ 6.12 billion. Net debt fell to $ 27.46 billion from $ 30.10 billion.

BP declared a dividend of 5.46 cents per share for the first quarter, in line with the immediately preceding period, and a $ 2.5 billion repurchase that will run before the second quarter results. This represents an increase over the $ 1.6 billion share repurchase during the first quarter.

As for the second quarter, BP predicted that its upward production would fall as a result of the fall in the base, seasonal maintenance and the absence of production of joint ventures in Russia. However, refining margins are expected to be higher and energy prices are expected to remain high.

For the whole of 2022, BP continues to expect broadly flat up production despite leaving Russia.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

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