Boston, MA 07/30/2014 (wallstreetpr) – BP PLC (ADR) (NYSE:BP) remains worried that further sanctions imposed on Russia could considerably hurt its business in the country and that of Russian state oil company Rosneft. The giant oil company acknowledged that to date; the sanctions have not had a substantial effect on its business but warned of the future. BP relies on Russia for a third of its Crude oil output. BP with its 19.75% stake in Russian state oil company Rosneft has over the past insisted that it will stand on its investments in the country amidst the standoff between Russia and other countries.
European Union Could Worsen the Situation
Things could turn out soar for the company if the European Union decides to carry out punitive action against Russia after it was accused of supporting rebels who downed a Malaysian airline. Some of the sanctions that the European Union might invoke on Russia include financial restrictions and a ban on exports for equipment used by oil and gas producers.
36% Increase in Cost Profits
French oil Services firm Technip has already reduced its margin targets for this year citing the impact of possible sanctions in Russia which could somehow affect its income flows from Siberia. Despite the ongoing standoff, BP registered a 36% increase in underlying replacement cost profit to $3.6 billion. The second quarter was a successful one for BP after BP PLC (ADR) (NYSE:BP) delivered both operational progress and robust cash flow.
The impressive results were aided by increased production in the recently started higher-margin upstream projects in the Gulf of Mexico. Increased processing of heavy crude oil at Whiting Indiana refinery also had a substantial impact on the company’s results. The company’s upstream segment posted an underlying pre-tax replacement cost profit of $4.7 billion up from $4.3 billion a year ago
Higher crude prices against low-market expectations also had appositive impact onBP PLC (ADR) (NYSE:BP) in the second quarter.
