Russia’s Rosneft Sticks To ‘Privatization’ Pledge, Sells To Glencore And Qatar

Rosneft To Increase Oil Supplies To China Through Kazakhstan

Russian oil giant Rosneft completed a share sale on Wednesday in what it is calling its biggest ‘privatization’ in years. While still owned and operated by the Russian government, Rosneft CEO Igor Sechin announced today that commodities player Glencore and the Qatar government acquired a 19.5% stake in the company.  The company’s shares settled only 1% higher as the news came after market hours. The stock is up 40.6% year to date in rubles ,Forbes reported.

Sechin had said earlier in the day that Chinese and Kazakhstan bidders were the most likely to gain shares of the company, but Glencore and Qatar’s sovereign wealth fund came out of nowhere to outbid them.  The deal value based on outstanding shares was estimated to be at around $11 billion. The money went right into Russia’s federal budget.

Rosneft took over privately held Bashneft earlier this year in what amounted to as standard fare for the Russian government. A state run enterprise goes private; it’s wealthy owner is rounded up and placed under house arrest on some money laundering or tax scheme allegation and voila, the company’s assets are now in the hands of Sechin and his new foreign owners, Glencore and Qatar.

Rosneft has grown exponential over the years due to this kind of Russian-style acquisition of abrupt and unusual takeovers. Rosneft also acquired the assets of Yukos Oil, then owned by Russian exiled billionaire Mikhail Khodorkovsky.