May 3, 2022

BP: ditching Rosneft makes BP a smaller but slicker play for income investors

For some years BP avoided dealing with the large bear in the room: its 19.75 per cent holding in Russia's state oil company Rosneft. Still, BP could ride the wave of high oil prices in the first quarter, punching through analysts' earning forecasts. Rosneft has generated annual income of about $600mn for BP over the past five years. Jettisoning Rosneft slims BP down, scything $14.7bn of equity. BP is shooting for enhanced returns: ideally, a return to the 18 per cent average return on capital employed of the century's first decade - back when oil surpassed $100 a barrel.

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