“BP and Shell continue to invest in assets situated IN Russia. Are they clever or stupid? Boardroom groupthink or a long-term strategy? What yield should BP, in particular, be valued on?”

David Fuller's view

Thanks for these question which will be of interest to a number of subscribers.

BP and Shell have had interests in Russia since way before Putin’s latest aggression against Ukraine, resulting in mild sanctions to date.  Russia has plenty of oil and it needs their expertise and developmental cash, probably more than ever.  The oil industry is based on long-term strategies, often in risky countries, so there is little reason to leave at this time.  However, they would conform to any European or possibly even US sanctions against Russia applicable to their programmes.  BP and Shell currently have promising chart patterns and the yields of 5.09% and 4.35%, respectively, are attractive.