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Russia Delays $3 Billion Bashneft Share Sale Amid Kremlin Power Plays

Rosneft CEO Igor Sechin (right), a close ally of Russian President Vladimir Putin (left), wants to participate in the sale of Bashneft shares.

Russian Prime Minister Dmitry Medvedev has postponed the privatization of oil producer Bashneft, in a surprise move his spokeswoman said was approved by President Vladimir Putin.

Spokeswoman Natalia Timakova did not say on August 16 how long the Bashneft stake sale would be delayed.

The sale was expected to take a leading role in this year's privatization program and raise about $3 billion to help reduce government deficits. But it would have pitted some of Russia's most powerful officials against each other.

In recent weeks, tensions over the sale increased when Russian state oil giant Rosneft's chief executive Igor Sechin appealed to the Kremlin to allow his company to participate.

That move pitted Sechin, a close ally of Putin, against other Bashneft suitors, including Vagit Alekperov, one of Russia's richest men who heads private oil firm Lukoil.

Medvedev decided to delay the sale after Rustem Khamitov, the head of the republic of Bashkortostan where most of Bashneft's production assets are based, asked the Kremlin to delay or scale down the sale.

Russia had planned to auction a 50 percent stake in Bashneft to raise revenues for a government budget depleted by the slump in revenues from oil sales.

Based on reporting by Reuters, TASS, and RBC