Dear Sir Ed Davey - To Whom?
An idea is gaining some credence, that BP must be made to sell its stake in Rosneft. Sir Ed Davey for example:
On Friday Ed Davey, the Liberal Democrat leader, wrote to the Prime Minister urging him to sanction Rosneft and put pressure on BP to divest its stake.
He wrote: “It is unacceptable for a flagship British company like BP to hold such a large stake in a Russian state-backed company.”
It’s worth, perhaps, reminding that the British government no longer owns BP. Therefore what BP does - within the law - is not the concern of the British government.
But over and above that there’s the simple practicality of the idea. We’ve just - rightly so - placed significant sanctions upon the Russian economy. With effect from, we believe at least, 1 March no one may invest further in that economy. Bond issues may not be bought, capital markets are closing and so on. So, who could actually buy that 20% stake? No other oil major can. Private investors cannot. Institutions would be locked out. The only possible buyer would be someone within that Russian and sanctioned economy.
The price would be pretty bargain basement therefore.
The proposal is, therefore, that the largely outside Russia shareholders in BP should lose very large sums of money, someone inside Russia - or the Russian state itself - should be able to buy a large and valuable asset at pennies on the $. This is to be done in the name of punishing Russia and Russians.
Someone here has lost their minds and it isn’t us.
Now, if this sale had been forced through at some point in the past, the money safely banked before the sanctions, we would still be opposed to the idea but could admire the Machiavellian manipulation of selling at full price then slicing the value through sanctions. But to force the sale afterwards? It’s not just what are these people thinking, it’s are they thinking at all?
As is so often the case the proposals of those who rise to senior positions in politics are the finest and purest argument in favour of minarchy.