[selectodude]

"The change in accounting treatment also means that bp will no longer recognise a share in Rosneft’s net income, production and reserves"

If they were still a passive investor, they would still get a slice of revenue. They're totally divesting.

[kgwgk]

I don't think that you understand what "change in accounting treatment" means.

Usually, when a company owns AAPL shares, for example, they do not include in their revenue or net income their "share" of Apple's revenue or net income. They just consider the value of the shares and the dividends they get.

But when some conditions are met they do. From their annual report:

Significant judgement: investment in Rosneft

Judgement is required in assessing the level of control or influence over another entity in which the group holds an interest. For bp, the judgement that the group has significant influence over Rosneft Oil Company (Rosneft), a Russian oil and gas company is significant. As a consequence of this judgement, bp uses the equity method of accounting for its investment and bp's share of Rosneft's oil and natural gas reserves is included in the group's estimated net proved reserves of equity-accounted entities. If significant influence was not present, the investment would be accounted for as an investment in an equity instrument measured at fair value as described under 'Financial assets' below and no share of Rosneft's oil and natural gas reserves would be reported.

Significant influence is defined in IFRS as the power to participate in the financial and operating policy decisions of the investee but is not control or joint control of those policies. Significant influence is presumed when an entity owns 20% or more of the voting power of the investee. Significant influence is presumed not to be present when an entity owns less than 20% of the voting power of the investee.

bp owns 19.75% of the voting shares of Rosneft. Rosneft’s largest shareholder is Rosneftegaz JSC (Rosneftegaz), which is wholly owned by the Russian government. At 31 December 2020, Rosneftegaz held 40.4% (2019 50% plus one share) of the voting shares of Rosneft . IFRS identifies several indicators that may provide evidence of significant influence, including representation on the board of directors of the investee and participation in policy-making processes. bp’s group chief executive, Bernard Looney, was approved as a member of the board of directors of Rosneft in June 2020 as one of bp’s two nominated directors. bp’s other nominated director, Bob Dudley, has been a member of the Rosneft board since 2013. He is also chairman of the Rosneft board’s Strategic and Sustainable Development Committee. bp also holds the voting rights at general meetings of shareholders conferred by its 19.75% stake in Rosneft. Transactions by Rosneft in its own shares during the year have increased bp’s economic interest in Rosneft to 22.03% (2019 19.75%). bp's management considers, therefore, that the group has significant influence over Rosneft, as defined by IFRS.

[senko]

Divesting usually means selling.

No way in hell they're just giving them back to Rosneft.

[lazide]

That’s not necessarily what that means - it means they’re not going to attempt to get (or claim on their books) anything from Rosneft. If, for example, they never expect to get paid any of those amounts (even if technically owed them), they would also do that.

[mxschumacher]

that does not mean that they are selling their Rosneft shares to Rosneft

[selectodude]

They're not selling their shares to anybody. They're abandoning them. Rosneft, for obvious reasons, owns all the shares that aren't owned by anybody else so Rosneft gets control the shares back.

[mxschumacher]

there is simply no information available on what will happen to the shares, so your insistence is irritating. If the shares were dissolved, the other owners (such as the Russian government) would end up with a larger stake.

If a sale is taking place, the question is: to whom and for how much (Rosneft shares have been under fire on Thursday and Friday, along with all the other Russian stocks)

[kasey_junk]

And a big company dumping their sales on the market would add further downward pressure.

It’s really odd this threads insistence that shares are going to be “given” back to the company as the story doesn’t say that and it’s not what it typically means to exit a position.

[kgwgk]

You seem very confident for someone who doesn't understand what he's talking about.

If BP is "abandoning their shares", what do you thing that they mean by "the fair value of bp’s Rosneft shareholding at 31 March 2022"?

"First, it is expected to give rise to a non-cash adjusting item charge at the time of the first quarter 2022 results, representing the difference between the fair value of bp’s Rosneft shareholding at 31 March 2022 and the carrying value of the asset. At the end of 2021 this carrying value stood at around $14 billion."