Russia to ‘privatize’ Rosneft stake

Russia to ‘privatize’ Rosneft stake

MOSCOW - Reuters
Russia to ‘privatize’ Rosneft stake

President Sechin waits for the arrival of Russian President Putin in Sevastopol, May 9. REUTERS Photo

Russia could privatize a 19.5 percent stake in top oil producer Rosneft this year or in 2015, earlier than planned, Russia’s Vedomosti newspaper quoted government sources as saying on May 16.

The state owns 69.5 percent of Rosneft, the world’s largest listed oil company by production, but it eventually plans to reduce its shareholding to 50 percent 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 Vedomosti cited two government sources saying that 19.5 percent 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 percent stake would be worth 469.1 billion rubles ($13.5 billion) at current market values. Vedomosti did not give a reason for bringing the privatization forward.

Analysts cited by the paper said that present market conditions were unfavorable, 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.