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Qatar To Take Stake In Russia's Rosneft After Deal With China Falls Through

Rosneft Chief Executive Igor Sechin (file photo)
Rosneft Chief Executive Igor Sechin (file photo)

Qatar has agreed to take a 19 percent stake in Rosneft, rescuing the Russian state oil giant after its hopes of selling a major stake to a Chinese company fell through.

Qatar's sovereign investment fund QIA initially bought 19.5 percent of Rosneft jointly with Swiss trading giant Glencore for $12.2 billion during the Russian company's partial privatization in 2016.

But last year the consortium agreed to sell a 14.16 stake in Rosneft to CEFC China Energy in a $9.1 billion deal that was seen as key to helping expand relations between Russia -- the world's top energy exporter -- and China -- the top energy consumer.

That deal ran into trouble after CEFC Founder Ye Jianming was put under investigation by Chinese authorities over suspected economic crimes this year.

Glencore said on May 4 that its consortium with QIA to sell the Rosneft stake was dissolved, and Qatar and Glencore will now own the Rosneft stake directly.

It said QIA will control an equity stake of 18.93 percent and Glencore will hold some 0.57 percent.

"China's purchase of a stake in Rosneft has ended in a debacle. Russia's pivot to the East now feels more like a pivot to the Middle East, with Qatar coming to the rescue," Christian Boermel, an analyst at energy consultancy Wood Mackenzie, told the Reuters news agency.

Rosneft has been hit hard by U.S. sanctions on Russia over Moscow's aggression in Ukraine.

Currently, Reuters reported that the giant firm's stock is valued at only $65 billion despite producing more crude oil than U.S. ExxonMobil, which is valued at $324 billion.

Rosneft said it continues to consider China a strategic market, but welcomed the prospect of pursuing new joint international energy projects with Qatar.

Based on reporting by Reuters and TASS