Researchers do not expect dent in flow of cash to supermajors

Researchers do not expect the ongoing conflict between Russia and Ukraine to dent the flow of cash to BP (LON: BP) or TotalEnergies (PAR: TTE).

That is despite the two supermajors being the “most exposed” to disruption given their operations in the region, according to Morningstar.

Brent crude topped $100 a barrel yesterday for the first time since 2014.

Meanwhile shares in BP, which has a 19.75% holding in Russian stateowned operator Rosneft, took a sizeable hit.

Among the integrated oil companies, the London-listed firm has “some of the highest Russia exposure”, Morningstar said.

Its stake in Rosneft, worth about $16.5 billion at the beginning of the year, has crumbled and is now worth around $6bn.

But as BP benefits from the dividends Rosneft dishes out, the economic value of its share decline may not be that bad, particularly given that high oil prices could yield higher payments.

And while there is a risk of sanctions, so far they have been targeted at individuals rather than companies.

As such, Morningstar says the probability of disruption to BP’s cash flow or shareholder returns is low.

Similarly, TotalEnergies has a 19.4% interest in Novatek, Russia’s secondlargest natural gas producer.

Shares in Novatek have also plunged recently, though not by the same measure as Rosneft.

But, for the same reasons as BP, Morninstar does not forecast any “business disruption or interruption in cash flow” back to TotalEnergies.

A Ukrainian soldier participates in a drill.