Qatar and Glencore buy $11.3 billion stake in Russia’s Rosneft

Anglo-Swiss commodity trader Glencore and Qatar’s sovereign wealth fund have purchased a 10.2-billion euro ($11.3 billion) stake in Russian oil and gas company Rosneft.

The privatization deal concludes a sale of a 19.5 percent stake during the upward trend in the price of oil, Russian president Vladimir Putin  said during a meeting with Rosneft Chief Executive Igor Sechin on Wednesday in Moscow.

Putin said that with their participation in managing bodies, the investors will improve corporate procedure and the company’s transparency to increase its capitalization, while the company’s controlling stake still remains in the hands of the Russian state, over 50 percent.

Speaking of the agreement, Sechin noted that Rosneft conducted commercial talks with over 30 companies, foundations, professional investors, sovereign funds and financial institutions in Europe, the Americas, the Middle East, and the Asia Pacific region.

The consortium established by the Qatar sovereign wealth fund and Glencore hold equal stakes in the partnership, 50 percent each, and the first tranche of investment is expected in the coming days.

Sechin added that the payment to the state budget will be made both with the company’s own resources and with a loan organized by one of Europe’s largest banks.

“This transaction is not a simple portfolio investment, but a strategic deal with additional elements, such as the signing of a long-term offtake agreement with Glencore, the coordination of our market positions and the creation of a joint venture, which will work both in Russia and under international projects,” Sechin said at his meeting with the Russian president.

Overall, the privatization of 49 percent of Rosneft in a series of transactions has brought in nearly $34 billion.

LNG World News Staff