Rosneft responds to BP's comment on not being formally notified of dividend payments

by IANS |

Moscow, Nov 3 (IANS) Rosneft has fulfilled its obligation to pay dividends for 2021 to all shareholders, including BP.

Dividends due to BP in the amount of $700 million for the second half of 2021 were paid in full.

In compliance with the procedure for interacting with foreign contractors established by Presidential Decree No. 95 dated March 5, 2022, the funds have been transferred to a special C-type account established by Rosneft.

Rosneft has informed shareholders that dividends for the financial year 2021 will be paid in accordance with Russian law and its corporate procedures. The notice has been published on the corporate website, on the website of the information agency authorized by the Bank of Russia to disseminate information on the securities market, and on the website of the London Stock Exchange.

Russian regulators do not prohibit international businesses from operating in Russia. As a result of the sanctions imposed on the Russian financial system, the only forced measure introduced by the Russian authorities is the inability to transfer funds earned in Russia abroad. Therefore, the restrictions BP refers to in its report were imposed by the countries of the West collectively, not the Russian Federation.

There are no restrictions on BP, which remains a shareholder in Rosneft and participates in a number of joint ventures in Russia, to use the dividends for joint projects that Rosneft is executing alone, fulfilling the obligations. In September, Rosneft launched a major gas project in Kharampur with an annual production capacity of 11 billion cubic meters.

In November, the Board of Directors of Rosneft will decide on an interim dividend, which BP might think of using for projects in Russia. The dividend policy of Rosneft stipulates that at least 50 per cent of its IFRS net income may be allocated to dividends. Therefore, BP may increase its revenue from the Russian business by $700 million.

To date, BP has earned approximately $37 billion from its participation in equity capital and joint venture with Rosneft, while, in total, $10 billion was invested in cash. This is a reasonable result.

BP deliberately misrepresented the information in its financial statements by failing to reflect the dividends received from Rosneft. It is done for both political and economic reasons: on the one hand, BP wishes to avoid criticism from western politicians; on the other hand, it expects to save money by reducing the tax base in its country of incorporation and shareholder dividends.

By remaining a shadow shareholder in Rosneft, the British company is effectively disregarding the decision of its own Board of Directors to divest from Russian assets.

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