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BP warns on Russian sanctions despite surge in profits

Oilfield Technology,

BP has reported a 34% boost in second quarter profits, however has warned that further sanctions on Russia could have an adverse effect on the company’s finances and operations in the country.

BP owns an almost 20% stake in Russian state-controlled oil company Rosneft, and reported that underlying net income from Rosneft for the quarter was US$ 1.0 billion. BP added that it had received a dividend payment of approximately US$ 700 million earlier in July.

The group is concerned that investment in the business could be affected is western nations including the US and Britain impose further sanction on Russia in response to the conflict in Ukraine.

While BP said that to date, the sanctions had not had a significant impact on its business in Russia, the European Union is looking to weigh more punitive measures against Moscow following the downing of a Malaysian airliner in eastern Ukraine.

“If further international sanctions are imposed on Rosneft or new sanctions are imposed on Russia or other Russian individuals or entities, this could have a material adverse impact on our relationship with and investment in Rosneft, our business and strategic objectives in Russia and our financial position and results of operations”, BP warned.

According to the Guardian, earlier this month the US added Rosneft to its sanctions list, and the EU is expected to approve a ban on the export of advanced technology that could be used when drilling for oil in Russia. Igor Sechin, Rosneft Chairman and a close friend of Russian President Vladimir Putin, has been on the US sanctions list since April, the Guardian added.

Edited from various sources by Katie Woodward

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