The declaration of a change in strategy came as the company learned that minority shareholders in its soon-to-be-sold Russian operation TNK-BP Holdings have dropped claims for $3.2 billion of damages.
A Siberian court awarded the damages to the minority shareholders in July, though BP said at the time it was confident of winning an appeal against the decision. The decision to drop the legal action against BP comes after the British oil company agreed last month to settle all legal disputes with Alfa-Access-Renova, its 50/50 partner in TNK-BP Ltd., which in turn owns about 98% of TNK-BP Holdings.
BP and AAR have both agreed to sell their stakes in TNK-BP to Russia's state-controlled oil company OAO Rosneft for a total of about $56 billion.
BP has agreed the sale $65 billion of assets since 2010. That figure includes $37 billion of a targeted $38 billion of assets that were earmarked for sale to help fund the cost of the cleanup and pay damages resulting from the oil spill that occurred when BP's Deepwater Horizon oilrig exploded in the Gulf of Mexico in April 2010.
London-based BP will continue to sell assets, though at a more modest rate of $2 billion to $3 billion a year, as part of its ongoing portfolio management program, BP CEO Bob Dudley and CFO Brian Gilvary told an investor conference on Monday.
Dudley said that the company was now as small, in terms of assets, as was comfortable and that further large sales could inhibit future prospects by putting pressure on it to expand its oil reserves and by overly reducing cash flows.
In Russia, Dudley said he was discussing opportunities to work with Rosneft but said that the talks remained general in nature. Opportunities in the country could eventually include partnering with Rosneft to develop fields, in which BP could take an equity stake, or through license acquisitions independent of Rosneft. Dudley specifically noted the prospect of developing Russia's shale oil fields but said the company wanted to positions itself primarily as a deepwater expert.
BP had previously been blocked from buying assets in Russia except through TNK-BP.
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Proceeds from such a transaction could be used to bolster parts of the business where the company has scale and can have a more meaningful impact on financials. More video