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BP Exits Rosneft Stake Holdings Amid Russia-Ukraine Conflict
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BP plc (BP - Free Report) announced that it is withdrawing its stake in Russia-based oil and gas company, Rosneft, after operating for more than 30 years in the country.
The announcement marks the most significant movement by a western company in retaliation to Russia's attack on Ukraine.
BP was one of the biggest foreign investors in Russia before exiting its position. The company has been under immense pressure from the UK government to offload its stake in Russia.
BP has a 19.75% ownership interest in Rosneft, which it has owned since 2013. Rosneft is responsible for almost 50% of BP's oil and gas reserves and a third of its production. Notably, offloading the stake will result in charges of up to $25 billion.
In 2021, BP received revenues from Rosneft in the form of dividends, which totaled $640 million, nearly 3% of its net cash flow from operations. The company cited that it would no longer account for its share of reserves, production and profit from its stake in the exploration company.
BP is also planning an exit strategy from its other businesses in Russia, which involves three joint ventures, with a carrying value on its books of $1.4 billion. The company’s board believes that these decisions are in the best long-term interests of all shareholders.
BP will take an $11-billion foreign exchange non-cash charge after exiting Rosneft, which it will no longer include in its accounts. The company also expects a non-cash charge of up to $14 billion for the carrying value of Rosneft.
BP mentioned that its move would not impact its short and long-term financial targets. Notably, it will be worth noticing if other western companies follow BP’s bold stroke.
Company Profile & Price Performance
Headquartered in London, the U.K., BP is a fully integrated energy company, with a strong focus on renewable energy.
Shares of the company have underperformed the industry in the past six months. The stock has gained 17.5% compared with the industry's 37.5% growth.
Sunoco LP (SUN - Free Report) is a master limited partnership that engages in distributing motor fuel to roughly 10,000 customers, including independent dealers, commercial customers, convenience stores and distributors.
Sunoco currently has a Zacks Style Score of A for Value. For the quarter ended Dec 31, 2021, Sunoco declared a quarterly cash distribution of 82.55 cents per unit or $3.3020 on an annualized basis.
Headquartered in Houston, TX, ConocoPhillips (COP - Free Report) is primarily engages in the exploration and production of oil and natural gas. COP ended 2021 with proved reserves of 6.1 billion barrels of oil equivalent (Boe).
ConocoPhillips' earnings for 2022 are expected to surge 62.1% year over year. COP revised higher its expected 2022 return of capital to shareholders. The new guidance is at $8 billion, reflecting an increase from the previously mentioned $7 billion.
Valero Energy Corporation (VLO - Free Report) is the largest independent refiner and marketer of petroleum products in the United States. At the fourth-quarter end, VLO had cash and cash equivalents of $4,122 million.
Valero's earnings for 2022 are expected to surge 152.7% year over year. VLO currently has a Zacks Style Score of A for both Value and Growth, and B for Momentum. Through the December-end quarter, Valero returned $401 million to stockholders as dividend payments.
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BP Exits Rosneft Stake Holdings Amid Russia-Ukraine Conflict
BP plc (BP - Free Report) announced that it is withdrawing its stake in Russia-based oil and gas company, Rosneft, after operating for more than 30 years in the country.
The announcement marks the most significant movement by a western company in retaliation to Russia's attack on Ukraine.
BP was one of the biggest foreign investors in Russia before exiting its position. The company has been under immense pressure from the UK government to offload its stake in Russia.
BP has a 19.75% ownership interest in Rosneft, which it has owned since 2013. Rosneft is responsible for almost 50% of BP's oil and gas reserves and a third of its production. Notably, offloading the stake will result in charges of up to $25 billion.
In 2021, BP received revenues from Rosneft in the form of dividends, which totaled $640 million, nearly 3% of its net cash flow from operations. The company cited that it would no longer account for its share of reserves, production and profit from its stake in the exploration company.
BP is also planning an exit strategy from its other businesses in Russia, which involves three joint ventures, with a carrying value on its books of $1.4 billion. The company’s board believes that these decisions are in the best long-term interests of all shareholders.
BP will take an $11-billion foreign exchange non-cash charge after exiting Rosneft, which it will no longer include in its accounts. The company also expects a non-cash charge of up to $14 billion for the carrying value of Rosneft.
BP mentioned that its move would not impact its short and long-term financial targets. Notably, it will be worth noticing if other western companies follow BP’s bold stroke.
Company Profile & Price Performance
Headquartered in London, the U.K., BP is a fully integrated energy company, with a strong focus on renewable energy.
Shares of the company have underperformed the industry in the past six months. The stock has gained 17.5% compared with the industry's 37.5% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
BP currently has a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Sunoco LP (SUN - Free Report) is a master limited partnership that engages in distributing motor fuel to roughly 10,000 customers, including independent dealers, commercial customers, convenience stores and distributors.
Sunoco currently has a Zacks Style Score of A for Value. For the quarter ended Dec 31, 2021, Sunoco declared a quarterly cash distribution of 82.55 cents per unit or $3.3020 on an annualized basis.
Headquartered in Houston, TX, ConocoPhillips (COP - Free Report) is primarily engages in the exploration and production of oil and natural gas. COP ended 2021 with proved reserves of 6.1 billion barrels of oil equivalent (Boe).
ConocoPhillips' earnings for 2022 are expected to surge 62.1% year over year. COP revised higher its expected 2022 return of capital to shareholders. The new guidance is at $8 billion, reflecting an increase from the previously mentioned $7 billion.
Valero Energy Corporation (VLO - Free Report) is the largest independent refiner and marketer of petroleum products in the United States. At the fourth-quarter end, VLO had cash and cash equivalents of $4,122 million.
Valero's earnings for 2022 are expected to surge 152.7% year over year. VLO currently has a Zacks Style Score of A for both Value and Growth, and B for Momentum. Through the December-end quarter, Valero returned $401 million to stockholders as dividend payments.