BP Plc has reached out to state-backed firms in Asia and the Middle East as it searches for a way to offload its Russian assets, people with knowledge of the matter said.
The U.K. energy giant has made preliminary approaches to China National Petroleum Corp. and Sinopec Group about the planned sale of its roughly 20% stake in Russia’s Rosneft PJSC, according to the people. It has selectively reached out to some potential buyers in the Middle East, the people said, who asked not to be identified because the information is private.
The efforts have gained little traction so far, showing how tricky it will be for companies to untangle themselves from their Russian investments. Any potential buyer would face political difficulties: you might anger Western governments by continuing to do business in Russia, while simultaneously upsetting Moscow by aiding a foreign firm’s efforts to pull out.
BP could also seek to do a deal with Rosneft, either handing the stake back or selling it at a huge discount. It considers a transaction with Rosneft as the most realistic path because it would struggle to sell down on the market or find another buyer for the stake given the sanctions on Russia, Bloomberg News reported in February.
London-listed BP has already warned it could take a hit of as much as $25 billion as a result of quitting Russia, where it’s been active for three decades. Deliberations are ongoing, and there’s no certainty as to what form BP’s exit could take.
A spokesperson for BP said the company continues to pursue an exit from its interests in Rosneft and businesses with them in Russia, declining to comment further. Representatives for CNPC, Sinopec Group and their listed units didn’t immediately respond to requests for comment. Spokespeople for ONGC and Indian Oil also didn’t respond to queries.
China is considering buying or increasing stakes in Russian energy and commodities companies, Bloomberg News reported this month. Beijing is in talks with its state-owned firms including CNPC, Sinopec Group, Aluminum Corp. of China and China Minmetals Corp. on any opportunities for potential investments in Russian assets, people with knowledge of the matter have said.
Any deal would be aimed at bolstering China’s imports as it intensifies its focus on energy and food security, according to the people.
Russian Foreign Minister Sergei Lavrov arrived in China this week for talks on Afghanistan, his first visit to the world’s second-biggest economy since the war in Ukraine started. Lavrov is also set to visit India on Thursday to discuss the sale of Russian crude oil to the country and the possibility of a rupee-ruble denominated payment method that could work outside the SWIFT messaging system, Bloomberg News reported.
BP Chief Executive Officer Bernard Looney visited India last week and met the country’s oil minister, Hardeep Singh Puri. The two discussed the global energy landscape, the politician said in a Twitter post.
Other potential buyers of the stake already have connections to Rosneft. Qatar’s sovereign wealth fund is one of the Russian oil company’s biggest shareholders. Rosneft also owns stakes in offshore exploration projects in Mozambique where state-owned QatarEnergy also holds an interest.