BP boosted by Rosneft despite Russia warnings

Oil giant BP today announced a better-than-expected jump in second-quarter profits, fuelled largely by its investment in Russia’s state-owned oil giant Rosneft in which it has a nearly 20% stake.

The results came as it warned any further international sanctions imposed on Russia over Ukraine and the MH17 plane crash could have a “material adverse impact” on the company.

BP said profits for the quarter had risen by 34% to $3.64 billion (£2.14 billion) from a year earlier.

This came on the back of $1 billion of profits from its investment in Rosneft, nearly five times higher than a year ago.However, despite BP announcing an 8.3% increase in the dividend to 9.75 cents, the shares fell 2.66p to 494.19p.

The warning about Russia comes days after the country threatened to seize the assets of UK firms as a retaliation against David Cameron’s demand for tough sanctions.

A senior diplomatic source was quoted as saying Moscow would “fight back” against any industry-wide sanctions by putting British companies involved in Russian oil on the front line.

The official measures will include seizing the assets of British businesses in Russia. BP also increased its provision for litigation relating to the 2010 Gulf of Mexico oil spill by $260 million, taking the total pre-tax charge to $43 billion.

Centrica is set to appoint departing BP executive Iain Conn as its new boss on Thursday, paying him a lower salary and potential reward package than current chief Sam Laidlaw.

Conn will reportedly receive a wage of just over £900,000 and a “golden hello” worth far less than a reported £5 million figure.