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By Sarah Young and Dmitry Zhdannikov
LONDON, March 4 (Reuters) - Oil major BP stands byits investments in Russia, chief executive Bob Dudley said onTuesday amid calls from U.S. officials to isolate Russia andreduce economic cooperation with Moscow over the Ukrainiancrisis.
"In terms of Russia, we absolutely stand by our investmentin Russia," Chief Executive Bob Dudley, a U.S. citizen, told aninvestor conference on Tuesday.
U.S. Secretary of State John Kerry has condemned Russia's"act of aggression" in Ukraine and threatened economic sanctionsby the United States and allies to isolate Moscow.
The British oil major is the biggest foreign investor in theRussian oil sector through its stake of under 20 percent in theKremlin's state oil champion Rosneft.
Russia is responsible for over a quarter of BP's oil outputworldwide and more than a third of its oil and gas reserves.
"We have had good results, Rosneft had good results thisyear, and so that's just part of our big portfolio of things,"said Dudley, who has a history of difficult relationships withRussian officials during his time as an oil executive in Moscow.
Dudley had to flee Russia, saying he feared for his securityduring a 2008 dispute between BP and a group of Russianoligarchs over corporate governance at TNK-BP, where Dudley waschief executive at the time.
TNK-BP was ultimately sold to Rosneft for $55 billion lastyear, giving BP a stake in Rosneft and putting an end to yearsor bitter although very profitable relations with the oligarchs.
Analysts praised the deal at the time but said they wereconcerned about BP's exposure to Rosneft, run by an ally ofPresident Vladimir Putin - Igor Sechin - one of the architectsof Putin's mass oil sector nationalisation.
"It was only 11 months ago that the merger, or theacquisition by Rosneft, of TNK-BP occurred, it has been aremarkably fast integration of the organisations on thestructure, there are a lot of industrial synergies," saidDudley.
The company sought to reassure investors over the U.S.appeals court decision on Monday to reject a BP bid to blockbusinesses from recovering money over the 2010 Gulf of Mexicooil spill, even if they could not trace their economic losses tothe disaster.
"There is plenty of capacity within the existing provisionfor things that we will come up," Brian Gilvary, chief financialofficer, told the same presentation.
"It's a different company now, the company can weatherthings," Dudley added.
"WHAT INVESTORS WANT TO HEAR"
Dudley and his management team focused their marathonpresentation on BP's ongoing work to become "a smaller andsimpler company" following accomplished and planned assetdivestments of almost $50 billion.
The firm will now focus on growing operating cash flows by2018 and redistributing surplus cash through buybacks.
"I think we will confuse our investors if we start talkingabout us considering large M&A. I don't think that's what ourinvestors want to hear from us. It's a really strong plan thatwe can lay out and work towards, generate the operatingcashflow, look forward to distributions to shareholders, have aprogressive dividend policy. That's the path we're on," saidDudley.
As part of the ongoing review of assets BP will separate itsonshore U.S. oil and gas assets into a new wholly-owned businessto improve the competitiveness of its shale gas portfolio there.
A number of big oil companies, including rival Europeanoperators Shell and BG, have struggled aftermaking big investments in U.S. shale which have left themexposed to depressed gas prices, dragging on their profits.
But Gilvary said that the U.S. onshore business was notbeing separated because it was loss-making.
"On an earnings basis, this business today is comfortably inprofit, it's not making a loss today in this quarter. It isdeeply strategic to us in the future. That business will berepositioned so that we can really make sure that we can findthe value inside that business," he said.
