Russia could look to sell Rosneft stake sooner

rosneft19 May 2014, News Wires – Russia could privatise a 19.5% stake in top oil producer Rosneft this year or next, earlier than planned, according to reports.

The state owns 69.5% of Rosneft, the world’s largest listed oil company by production, but it eventually plans to reduce its shareholding to 50% plus one share. Rosneft’s chief executive, Igor Sechin, is a close ally of President Vladimir Putin.

Russia had been planning the sale of a stake in the company in 2016 but Russia’s Vedomosti newspaper cited two government sources on Friday saying that 19.5% minus one share could be sold as early as this autumn, or in 2015.

The sources said that a decision on the timing and size of any sale would depend on advice from an investment bank which had yet to be appointed. A 19.5% stake would be worth 469.1 billion roubles ($13.5 billion) at current market values, according to Reuters.

Vedomosti did not give a reason for bringing the privatisation forward.

Rosneft declined immediate comment to Reuters.

Analysts cited by the paper said that present market conditions were unfavourable, and that Russia could easily raise finance from domestic borrowing instead, but that there may have been a preliminary agreement with strategic investors from Asia.

Russia’s stock market has fallen sharply in recent months as a result of the East-West standoff over Ukraine, reducing the price that Russia can receive by selling state companies and delaying overall privatisation plans.

About the Author