Kremlin says Russia privatises 19.5% of oil giant Rosneft

PanARMENIAN.Net - The Kremlin on Wednesday, December 7 said that Russia had finalised a deal to privatise 19.5 percent of state-owned oil giant Rosneft, in the largest deal of its kind this year, as the country pushes to reduce its daunting debt mountain.

Rosneft chief Igor Sechin informed President Vladimir Putin "about the completion of a privatisation deal of 19.5 percent of shares of the largest Russian oil company Rosneft," Kremlin spokesman Dmitry Peskov told reporters.

He added that its investors were the Swiss commodities giant Glencore Consortium and Qatar's sovereign fund and that the move would contribute 10.5 billion euros to the budget as the country's struggles with enduring economic woes.

The move, which Putin hailed as the largest privatisation deal in the global energy sector in 2016, also comes as oil prices have soared to more than $50 a barrel after OPEC members last week hammered out a deal to cut oil output for the first time in eight years.

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

Putin stressed that the controlling stake in the company would remain in the hands of the Russian government, which controls over 50 percent of shares.

He called on Rosneft, the Finance Ministry and the Central Bank to ensure that the deal will not destabilise the country's financial market.

Sechin told Putin that Rosneft had taken part in talks with "more than 30 companies, funds, professional investors, sovereign funds, financial institutions from countries in Europe, the Americas, the Middle East and the Asia-Pacific region" ahead of the deal.

Glencore said in a statement that the deal "will be conditional on the subsequent finalisation of all relevant financing, guarantee and other agreements," and could be closed in mid-December.

The statement added that its five-year offtake agreement with Rosneft represents "a sizeable additional 220,000 barrels per day" for the company.