BP Still In Spotlight Over Incomplete Russia Exit
Since Russia’s invasion of Ukraine On February 24, 2022, multinational companies have come under intense pressure from investors and consumers to exit operations, sell businesses or write down their investments in Russia. Shortly thereafter, Jeffrey Sonnenfeld, professor at Yale University’s School of Management, created a global list of foreign companies that trade in Russia. Sonnenfeld’s list assigns grades to nearly 1,400 companies, from an A for complete withdrawal to an F for what he calls “digging in.” His comprehensive directory has managed to become a cudgel against companies that have stubbornly held fast, and made Sonnenfeld persona non grata in Russia after being added to the country’s ‘Stop List’ alongside 24 other American policymakers including Jill Biden and Mitch McConnell Sonnenfeld has told Bloomberg that he noticed an unusual pattern as U.S. businesses started withdrawing from Russia: the first movers actually were oil giants with complex local ties and huge sunk costs; and tech companies wary of the political complications and professional firms that hate to offend their clients rather than consumer brands sensitive to public sentiment. He says he learned that professional and tech companies responded to employee pressure to take a stand over concerns about social responsibility while oil company leaders could see starkly how their business would directly fund Putin’s war. Sonnenfeld’s advocacy has clearly borne fruit: 200 companies exited Russia less than a week after he posted the first version of his list online in early March. So far, only 6.1% of American companies have carried on with business as usual while 28.7% have completely halted operations. What About the Oil? BP has been called out for what some view as its insincerity, but research into its ties to Rosneft from a media perspective are lacking. Reports criticizing BP offer no concrete evidence to support accusations. Last month, Oleg Ustenko, an advisor to Ukrainian President Volodymyr Zelensky, called BP’s stake in Russia’s state-run oil giant Rosneft “blood money”. He even penned a letter to BP CEO Bernard Looney, accusing the company of making hundreds of millions of dollars via its stake in Rosneft. So what happened here? Just days after Russia launched its invasion of Ukraine, BP announced that it would exit its 19.75% stake in Rosneft. But that exit is still not complete, 10 months later. In Q4 2022, when Rosneft announced it would pay a 9-month dividend of what amounts to some $3.6 billion, some sources suggested that BP would net over $706 million as a result. A new report by the Moral Rating Agency (MRA), accuses BP (along with HSBC Holdings and Unilever) of having failed to properly exit Russia, using “loopholes” in international sanctions to continue operating there. According to BP, however, while the company is aware of Rosneft’s payment of dividends, BP “has not received any payments since its decision of 27 February [to exit its stake]. It has no expectations of receiving any in the future”. And while BP has not managed to complete its exit from Rosneft, the company notes that it “continues to actively pursue the disposal of its shareholding in Rosneft”. “The process is complex due to both international sanctions and Russian regulations. bp is actively engaged in marketing the asset, but its ability to sell is constrained by Russian legislation and the Russian government, who have effective approval rights on any buyer, as well as by limitations resulting from international sanctions. It was anticipated that this would be – and it is proving to be – a drawn-out process,” BP noted in a statement on its website. The bottom line is that the damage was already done and it is no longer relevant to talk about the details of BP’s exit–or others. Big oil funded Putin’s invasion of Ukraine, of course. Oil and gas revenues earned Putin’s regime some $100 billion since 2014. It’s pointless now to discuss who has pulled out and who hasn’t. However, when it comes to big oil–they were the first to jump ship at the start of the invasion, when they all chimed in, in unity: “This military action represents a fundamental change,” BP Chair Helge Lund stated. “It has led the BP board to conclude, after a thorough process, that our involvement with Rosneft, a state-owned enterprise, simply cannot continue.” “We are shocked by the loss of life in Ukraine, which we deplore, resulting from a senseless act of military aggression which threatens European security,’ Ben van Beurden, Shell’s chief executive, said. ‘We cannot – and we will not – stand by.’
China, India lead $534 billion global gas pipeline build-out
China and India are building more gas transmission pipelines than the rest of the world combined, spearheading a 9 per cent year-on-year increase in the length of pipelines under construction globally, according to data from Global Energy Monitor. The 2022 year-end survey of data in the Global Gas Infrastructure Tracker shows that 17,800 kilometers (km) of gas pipelines are under construction in China at an estimated cost of $21.9 billion and 14,300 km in India at $20.7 billion, a distance circling over three-quarters of Earth. Iran, Russia and Pakistan follow China and India as the countries with the most gas pipelines under construction. Globally, there are 59,100 km of gas transmission pipelines under construction and an additional 151,300 km of proposed pipelines. These pipelines in development are estimated to cost $533.6 billion in capital expenditure. The total 210,400 km of gas pipelines in development globally is an increase of roughly 9 per cent from this time last year. The leading five countries in terms of in-development pipelines (proposed and under construction) are China, Russia, India, Australia, and the United States. The top five parent companies developing pipelines are state-owned enterprises headquartered in Russia (Gazprom), China (PipeChina), India (GAIL), Nigeria (NNPC), and Iran (Ministry of Oil). The longest pipeline projects under construction are the 2,775-km Iran-Pakistan Pipeline and the 2,655-km Jagdishpur-Haldia-Bokaro-Dhamra Natural Gas Pipeline (JHBDPL) in India. China is home to the largest pipeline networks in various stages of development, including the Anhui Gas Pipeline Network and the Guizhou Gas Pipeline Network. Through its 14th Five-Year Plan, the republic intends to double the length of gas transmission pipelines by 2025, largely through expanding provincial networks. Baird Langenbrunner, Project Manager for the Global Gas Infrastructure Tracker, said, “Building more gas pipelines when the world needs to urgently quit fossil fuels is a worrying trend. This infrastructure risks becoming a stranded asset as countries move towards renewable energy systems.” Global Energy Monitor (GEM) is a San Francisco-based non-governmental organization that develops and shares information focused on clean energy projects.
EU imported six times fossil fuel energy from Russia than India has done since February 2022: EAM Jaishankar
External Affairs Minister S Jaishankar has said that Europe has imported six times the fossil fuel energy from Russia than India has done since February 2022 and if a USD 60,000-per-capita society feels it needs to look after itself, “they should not expect a USD 2,000-per-capita society to take a hit.” A New York Times report titled ‘Russia’s War Could Make It India’s World’ said that the “invasion of Ukraine, compounding the effects of the pandemic, has contributed to the ascent of a giant that defies easy alignment. It could be the decisive force in a changing global system.” The report quoted Jaishankar as saying that a “world order which is still very, very deeply Western” is being hurried out of existence by the impact of the war in Ukraine, to be replaced by a world of “multi-alignment” where countries will choose their own “particular policies and preferences and interests.” “I would still like to see a more rules-based world. But when people start pressing you in the name of a rules-based order to give up, to compromise on what are very deep interests, at that stage I’m afraid it’s important to contest that and, if necessary, to call it out,” the NYT article quoted Jaishankar as saying. He added that “since February, Europe has imported six times the fossil fuel energy from Russia that India has done. So if a USD 60,000-per-capita society feels it needs to look after itself, and I accept that as legitimate, they should not expect a USD 2,000-per-capita society to take a hit.” The NYT report said that could India, with its ties to Russia, mediate a cease-fire in Ukraine, or even a peace settlement. Noting that Jaishankar was skeptical on this, it quoted him as saying, “The parties involved have to reach a certain situation and a certain mind-set.” On when will the war end, Jaishankar said in the report “I wouldn’t even hazard an opinion.” The report noted that still, India wants to be a “bridge power” in the world birthed by the pandemic and by the war in Ukraine. “It believes that the interconnectedness of today’s world outweighs the pull of fragmentation and makes a nonsense of talk of a renewed Cold War. If a period of disorder seems inevitable as Western power declines, it will most likely be tempered by economic interdependence, the Indian argument goes,” the NYT report said. “With inequality worsening, food security worsening, energy security worsening, and climate change accelerating, more countries are asking what answers the post-1945 Western-dominated order can provide. India, it seems, believes it can be a broker, bridging East-West and North-South divisions,” the report said. “I would argue that generally in the history of India, India has had a much more peaceful, productive relationship with the world than, for example, Europe has had,” Jaishankar said. “Europe has been very expansionist, which is why we had the period of imperialism and colonialism. But in India, despite being subjected to colonialism for two centuries, there’s no animus against the world, no anger. It is a very open society.” The NYT report said that Prime Minister Narendra Modi’s India is pursuing its own interests with a new assertiveness, “throwing off any sense of inferiority and rejecting unalloyed alignment with the West. But which India will strut the 21st-century global stage, and how will its influence be felt?” The report added that India is at a crossroads, “poised between the vibrant plurality of its democracy since independence in 1947 and a turn toward illiberalism” under Modi, and said Modi’s India seems to brim with confidence. “The Ukraine war, compounding the effects of the Covid-19 pandemic, has fueled the country’s ascent. Together they have pushed corporations to make global supply chains less risky by diversifying toward an open India and away from China’s surveillance state. They have accentuated global economic turbulence from which India is relatively insulated by its huge domestic market,” the NYT report said.