BP plays down Rosneft sanctions threat

The escalation of US action over Crimea has spooked BP investors, who in 2012 saw the group pay almost $15bn (£8.9bn) for shares in Rosneft as it reinvested some of the $27bn proceeds from selling its 50pc stake in TNK-BP.

Mr Dudley, who was presenting BP’s first-quarter results, declined to be drawn on the implications of any US sanctions against Rosneft.

“Speculating on worst cases is like projecting what happens if the oil price falls to $10,” Mr Dudley said, acknowledging that “recent events have created some volatility in Russia from the markets and the weaker rouble”.

The falling Russian currency was a key factor in BP’s share of Rosneft’s operating profits dropping to an underlying $271m in the first quarter – down from $1.09bn in the last three months of 2013.

Mr Dudley stressed, however: “Our commitment to Rosneft is a long-term one, our relationship continues to grow and we believe it will have significant benefits to both Rosneft and BP.”

Underlying BP profits for the first three months fell to $3.23bn, down from $4.22bn for the same quarter in 2013. Reported profits fell to $3.48bn from $16.6bn last time, when BP booked a $12.5bn gain on its TNK-BP sale.

Mr Dudley said BP had made “a solid start to the year and put us firmly on track to deliver the goal of $30bn-$31bn operating cash flow” in 2014.

But some analysts were surprised at the size of the $521m hit from BP withdrawal from the Utica shale project in northern America.

BP also warned that production, down 8.5pc in the first quarter to 2,131m barrels of oil equivalent a day, would drop in the second quarter, mainly due to temporary shutdowns in the North Sea and Gulf of Mexico.

There was little news on the Macondo oil spill litigation, where hearings into liability under the Clean Water Act are due to start on January 20 next year.

The dividend increased 8pc to 9.75 cents. The shares rose 14.25 to 502.6p.

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