European oil giant BP (NYSE:BP) has a lot to lose from the escalating conflict between Russia and the Ukraine. Due to hefty investments made in Russia over the past few years, BP has a lot riding on what happens in Eastern Europe. Now that geopolitical risk has reared its ugly head, you should know that BP appears to be on some shaky ground.

While it's important to not get too carried away with what might happen in the Ukraine, you should know that BP has an enhanced risk profile, above other integrated oil and gas majors. For better or worse, BP has an entrenched footprint in Russia that has the potential to significantly affect the company's results. This is what places BP in unique territory when compared to its European peers like Statoil (NYSE:EQNR), and is a reason why BP investors should be concerned.

BP's reliance on Russia
BP has allocated significant financial resources into Russia through an equity investment in oil giant Rosneft. At the time, this looked like a savvy management strategy to give the country a solid entry into emerging-market energy production. After all, Russia is a premier emerging economy and a major oil and gas producer. Remember that Russia is included in the BRIC nations, along with Brazil, India, and China.

BP now owns 20% of Rosneft through its equity investment. This represents a significant percentage of BP's operations, particularly since BP has severely cut back its operations in other areas. In the years since the 2010 oil spill in the Gulf of Mexico, BP has sold off billions of assets to raise cash. To be exact, BP has unloaded $38 billion worth of assets since 2011 as part of its divestment program. This means that BP is a much smaller and streamlined company than it's been in the past, making its Rosneft position a large slice of its overall pie.

A unique position in Russia
That's how BP described its exposure to Russia when it published its 2014 Investor Update presentation. BP generated $1.1 billion in profit from its shareholding in Rosneft in the fourth quarter alone. BP's equity position in Rosneft accounts for approximately 28% of its 3.2 million barrels per day of production and 37% of its 18 billion barrels of oil reserves.

BP's position in Russia is significant not just in absolute terms, but also when stacked up against Statoil's. Statoil produced just 6,000 barrels per day in Russia last year. In comparison, BP produced an average of 961,000 barrels per day in Russia last year. And, Statoil holds only about 30 million barrels of oil equivalents in net Russian reserves, whereas BP's reserves stand at about 14.3 billion barrels.

In BP's fourth-quarter earnings presentation, management described its relationship with Rosneft as a growing partnership, one that will have "significant long-term benefits for both Rosneft and BP." With the dark clouds of political risk hanging over BP because of the Russia-Ukraine conflict, the future is uncertain.

Keep tabs on Russia going forward
The stock market is looking increasingly shaky as strife between Ukraine and Russia escalates. The S&P 500 sold off on Friday, April 25 after it was revealed the Obama administration and four European allies would impose new sanctions on Russia. Russian stocks obviously lost value and have a lot to lose from the conflict, but so do some U.S. and European companies with exposure to Russia.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.