Accessibility links

Breaking News

Kremlin: Glencore, Qatari Fund Buy Minority Rosneft Stake


Russian President Vladimir Putin (left) reportedly told Rosneft CEO Igor Sechin to prepare a currency-conversion arrangement that would avoid "fluctuations."
Russian President Vladimir Putin (left) reportedly told Rosneft CEO Igor Sechin to prepare a currency-conversion arrangement that would avoid "fluctuations."

The Kremlin says Russia has finalized an agreement to privatize 19.5 percent of state-owned oil company Rosneft in a deal worth around $11 billion with a consortium of Swiss commodities giant Glencore and the Qatari sovereign wealth fund.

Kremlin spokesman Dmitry Peskov announced the deal on December 7 following a meeting between President Vladimir Putin and Rosneft chief executive Igor Sechin.

Sechin was quoted by the state-run TASS news agency as saying that the Glencore and the Qatari fund hold equal shares.

The deal is part of a push by Russia to privatize some government assets amid a recession triggered in large part by collapsing oil prices in recent years that drained government revenue.

"Vladimir Putin called it the largest deal on the global energy market in 2016," Peskov was quoted by TASS as saying.

Putin told Bloomberg in an interview published in September that Russia was seeking to sell the 19.5 percent stake to strategic investors through a private placement rather than through a public securities offering, in an effort to maximize revenue for the government.

The deal comes as oil prices have risen to more than $50 a barrel after members of the OPEC oil cartel last week agreed to cut their production by 1.2 million barrels a day in a bid to boost slumping global prices.

"The transaction was made on an upward trend in oil prices and reflects on the value of the company," Putin told Sechin during the meeting in footage broadcast on state television. "In that sense this is a good time."

Putin noted that the Russian government, which owns more than 50 percent of Rosneft shares, would maintain its controlling stake in the company.

Sechin told Putin that the deal was made possible "only thanks to your personal contribution."

He added that Rosneft had held talks with more than 30 potential investors across the globe.

Peskov told reporters on December 7 that Russia would receive 10.5 billion euros ($11.3 billion) from the deal and that Putin had told Sechin to prepare a currency-conversion arrangement that would avoid volatility on the foreign-exchange market.

"The president noted that a huge amount of currency [from the sale] will come to the country soon, and that an appropriate phased-conversion system should be provided," TASS quoted Peskov as saying.

The deal comes weeks after Economic Development Minister Aleksei Ulyukayev was arrested on charges of taking a $2 million bribe for facilitating state-owned oil giant Rosneft's takeover of another state-held oil company, Bashneft.

Ulyukayev, who was dismissed by Putin and has since been replaced, denies the allegations.

Putin said at last month's Asia-Pacific Economic Cooperation summit in Peru that the criminal case against Ulyukayev had no impact on the Russian government's privatization plans.

With reporting by AP, AFP, TASS, Reuters, Bloomberg, and Interfax
  • 16x9 Image


    RFE/RL journalists report the news in 27 languages in 23 countries where a free press is banned by the government or not fully established. We provide what many people cannot get locally: uncensored news, responsible discussion, and open debate.

RFE/RL has been declared an "undesirable organization" by the Russian government.

If you are in Russia or the Russia-controlled parts of Ukraine and hold a Russian passport or are a stateless person residing permanently in Russia or the Russia-controlled parts of Ukraine, please note that you could face fines or imprisonment for sharing, liking, commenting on, or saving our content, or for contacting us.

To find out more, click here.