Russian state holding company Rosneftegaz on Dec. 10 signed a deal with the Qatar Investment Authority (QIA) and commodities trader Glencore to sell a 19.5%stake in state-owned oil major Rosneft, Rosneft said.
The privatization deal, which Rosneft Chief Executive Igor Sechin called the largest in Russia’s history, was announced by Rosneft in a meeting with President Vladimir Putin on Dec. 7.
Its success suggests the lure of taking a share in one of the world's biggest oil companies outweighs the risks associated with Western sanctions imposed on Russia over the conflict in Ukraine.
Rosneft had been under pressure to secure a sale of the 19.5% stake to help replenish state coffers, hit by an economic slowdown driven by weak oil prices and exacerbated by sanctions.
Rosneft said in a statement the budget would receive 710.8 billion roubles (US$11.37 billion) from the sale, including 18.4 billion roubles in additional dividends from Rosneftegaz.
It said the additional dividends were due to a change in its dividend policy, according to which it will pay at least 35% of net profit according to international accounting standards in payouts twice a year.
Rosneft confirmed that Italian bank Intesa Sanpaolo was a major creditor for the deal and said it would be closed by the middle of December.
A Rosneft source said Intesa and a syndicate of four or five key banks would provide 7 billion euros of financing.
The Italian lender will provide “significantly over 50 percent” of the financing, while Glencore will hedge the bulk of its stake in Rosneft, the source added.
Sechin called QIA and Glencore “strategic investors” and said he was confident their work together would lead to synergies for Rosneft. ($1 = 62.5227 Russian roubles)
Recommended Reading
Oil Dips as Demand Outlook Remains Uncertain
2024-02-20 - Oil prices fell on Feb. 20 with an uncertain outlook for global demand knocking value off crude futures contracts.
Imperial Expects TMX to Tighten Differentials, Raise Heavy Crude Prices
2024-02-06 - Imperial Oil expects the completion of the Trans Mountain Pipeline expansion to tighten WCS and WTI light and heavy oil differentials and boost its access to more lucrative markets in 2024.
US Oil Stockpiles Surge as Prices Dip, Production Remains Elevated
2024-02-14 - EIA reported crude oil stocks increased by 12.8 MMbbl as February began, far outstripping expectations.
US Gulf Coast Heavy Crude Oil Prices Firm as Supplies Tighten
2024-04-10 - Pushing up heavy crude prices are falling oil exports from Mexico, the potential for resumption of sanctions on Venezuelan crude, the imminent startup of a Canadian pipeline and continued output cuts by OPEC+.
Oil Rises After OPEC+ Extends Output Cuts
2024-03-04 - Rising geopolitical tensions due to the Israel-Hamas conflict and Houthi attacks on Red Sea shipping have supported oil prices in 2024, although concern about economic growth has weighed.