Russia sells 19.5-per cent stake in oil giant Rosneft
08 December 2016
Russia said yesterday that it had sold a stake in oil giant Rosneft for €10.5 billion ($11.3 billion) to Qatar and commodities trader Glencore.
The deal for a 19.5-per cent stake in Rosneft from the Russian state-owned firm, suggested that the risk of sanctions imposed on Russia by the West, was weighing less with investors, according to commentators.
The deal comes days after Russia and OPEC agreed to coordinate output cuts to support oil prices, the first time they had acted in tandem in 15 years.
The state-owned company had kept the deal under wraps with the first word emerging when Russian president Vladimir Putin met Rosneft chief executive Igor Sechin last evening in Moscow.
"It is the largest privatisation deal, the largest sale and acquisition in the global oil and gas sector in 2016," Putin said in televised remarks from the meeting.
According to Sechin, the deal would see Glencore and Qatar's sovereign fund take equal shares of the 19.5 per cent stake in Rosneft, which was being sold by the government as part of a privatisation drive.
Rosneft had a market value of $59.17 billion, according to Reuters data.
According to commentators, the deal suggested that investors were reassessing the sanctions after the election of Donald Trump, who had advocated improving relations authorities in Moscow and was considering the chairman of Exxon Mobil, Rex W Tillerson, as a candidate for secretary of state.
The deal which would net Russia $11.3 billion would help Moscow narrow an increasing budget deficit, with Russia fighting two wars, in Syria and Ukraine, they added.
The agreement comes as surprise twist in the privatisation of Rosneft, with the end of the year deadline looming, no buyers coming forward for the 19.5 per cent share in the world's largest publicly traded oil company, as measured by production and reserves.