BP has reassured shareholders it will not be pushed out of Russia and will keep its 20% stake in the country's largest oil company despite rising tensions over Ukraine.
However, the oil and gas group faced a rebellion closer to home when more than 30% of its investors failed to back its executive pay report at its annual general meeting.
BP's chairman, Carl-Henric Svanberg, said Russia was "very keen" to maintain business relationships. Speaking at the AGM in London, he also dismissed concerns that the Russian state could seize BP's assets. Denying that BP's 20% stake in the Russian state oil company Rosneft is at risk, he said: "Expropriation would hit them dramatically. I can't see why that would happen." Chief executive Bob Dudley, who has a seat on the Rosneft board, said it was "business as usual".
Louise Rouse of Share Action said BP was making "a brave assumption" about the intentions of Russia's president Vladimir Putin. "They are overconfident regarding Putin and their belief that mutual self interest will work is naively optimistic," she said after the meeting.
BP also faced down a revolt over pay, as shareholders voiced anger over a decision to triple Dudley's pay package at a time when the company still faces huge costs over the Deepwater oil spill in the Gulf of Mexico four years ago. Dudley received $8.7m (£5.2m) in 2013, a reward that goes up to $13.2m dollars once pension contributions are included. Amid complaints that BP executives were overpaid while the company stumbled from one crisis to another, some 13% of shareholders voted against the executive pay report, while a further 19% abstained, an unusually large revolt by AGM standards.
Svanberg insisted BP had to pay high wages to keep its executives on board: "I can assure you these gentleman have had continuous offers from elsewhere."
The oil company avoided a bigger revolt after one large shareholder, Standard Life, decided to support the remuneration report for the first time in several years. "But although we recognise … improvements, the journey is not complete," said Mike Everett, governance and stewardship director at Standard Life.
Shareholders also blasted the company for paying out "unjustified" claims over the Deepwater spill. One shareholder claimed BP was a laughing stock in Louisiana for paying out "fallacious claims" . "Everybody who could conceivably write a letter claimed against BP. The fact it was British Petroleum made it fair game."
In a response that could raise eyebrows in US courtrooms, where legal battles are ongoing, Svanberg said: "You are describing the atmosphere there very well. I can tell you we have stopped quite a lot [of false claims]."
http://www.theguardian.com/business/2014/apr/10/bp-investors-business-russia
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