In a surprise move Russia announced on state TV that it had sold a US$11 billion stake in its largest oil producer to commodity trader Glencore and Qatar’s sovereign wealth fund each getting a 19.5 per cent holding in state-run Rosneft.
The long-planned sale looked like it was in trouble when a deadline for the sale missed recently but this announcement puts that to rest and helps the Russian government bring in some much need investment and help balance the budget amid continued low oil prices.
Russian President Vladimir Putin said on state television that the deal was one of the “largest acquisitions in the oil and gas sector in the world in 2016.”
Speaking at a televised meeting with Rosneft chief executive Igor Sechin, Putin noted that the deal follows a rally in global oil prices after OPEC's decision to cut production.
Glencore said in a statement that it would finance part of the deal by putting up €300 million of its own equity, with the rest financed by banks and by the Qatari sovereign fund. Glencore added that the deal was still in “final-stage negotiations” and would likely close in mid-December.
Russia will retain a controlling stake in Rosneft after the deal. BP Plc owns a 19.75 per cent stake in the company.
Sechin said that Glencore and the Qatari fund will form a consortium and have equal stakes. He added that Rosneft had conducted talks with more than 30 potential bidders before striking the deal.