BP plc has no plans to turn its back on considerable Russian oil and natural gas prospects, and the company, in fact, expects to play an important role to bridge engagement between Russia, as an energy supplier, and Europe, as an energy consumer, Group CEO Bob Dudley said Thursday.
Speaking at the company’s annual shareholder meeting, Dudley and BP executives updated how they see exploration and production in Russian partnerships proceeding. BP in 2012 sold its half-stake in Russian explorer TNK-BP to state-owned OAO Rosneft for $17.1 billion in a cash/stock transaction (see Daily GPI, Oct. 23, 2012). The deal gave BP a near-20% interest in Rosneft, and through various transactions as a result, Rosneft became the world's largest publicly traded oil company.
"We have a unique position with Rosneft in Russia, a position that gives us nearly a fifth of the world’s largest publicly traded oil company operating in a country with massive reserves and massive potential," Dudley told shareholders. "Clearly, the situation in Ukraine is currently the focus of world attention..."
However, BP plans to "pursue our business activities, mindful that the mutual dependence between Russia, as an energy supplier, and Europe, as an energy consumer has been an important source of security and engagement for both parties for many decades. I think we play an important role and a bridge."
Dudley also offered more insight into the legal proceedings in the United States related to the April 21, 2010 Macondo well blowout. Noting that the anniversary of the blowout is approaching, he said BP has "looked to be fair and consistent throughout those four years…” BP has maintained consistently "that the accident was the result of multiple causes involving multiple parties," a nod to the fact that the operator may face years fighting millions of claims by individuals and the federal government.
"We remain very committed to BP playing a major part in the future prosperity of the Gulf of Mexico region, where we invest billions, employ about 2,300 people and support tens of thousands more jobs in other businesses," Dudley said.
BP was the apparent high bidder in March on 24 of 31 leases for exploration in the Gulf Coast offshore last month (see Daily GPI, March 19). It was BP's first lease sale participation since federal officials lifted a suspension that prevented it from bidding on federal contracts.
"Our explorers are looking forward to returning to the Gulf as we pick up the momentum from 2013 and forge ahead as an even safer, stronger BP in search of the best value opportunities across the world," Dudley said.
Like many companies, BP "is on a journey." The company post-Macondo has sold about $38 billion of assets. It plans to sell another $10 billion in 2014 and 2015.
Now focused on putting value ahead of volumes, Dudley maintained that the value will come "not just from what we do, but from the way we do it." The restructuring has put BP "in good shape, but not at all complacent."