WSJ: Rosneft to buy back stake it sold to Qatar?

The Wall Street Journal has reported that Russia could buy back the stake in Rosneft it sold to Qatar and Glencore, however the two companies have quickly issued rebuttal statements.

To remind, Russia’s state-owned Rosneft in December 2016 sold a 19,5 percent stake in the company to a consortium comprising Glencore and Qatar Investment Authority for $10.5 billion.

At the time, Russia’s president Vladimir Putin said “the deal was made on an upward trend in the price of oil and it therefore reflects on the value of the company itself.“

However, The Wall Street Journal, citing people familiar to the matter, reported that the deal included a possibility for Russia to buy back the stake it sold to Qatar-Glencore at a later date.

It further reported that the deal actually worked as „an emergency loan to help Moscow through a budget squeeze,” with a view that Russia could buy the stake back within the next decade for a higher price, on the assumption that the oil price would grow by that time leading to an increase in Rosneft share price.

“Ill-informed allegations”

Qatar Investment Authority described the WSJ’s characterization of the transaction, and the provisions associated with it, as “wholly based on unfounded and ill-informed allegations.”

Before publication of the story, both Glencore and QIA informed the WSJ that the allegation of a buy back arrangement was untrue, QIA said.

QIA said it provided the newspaper with the following on-the-record statement: “Under the contractual arrangements under which the Rosneft shares were sold, there is no right of Rosneft, Rosneftegaz or the Russian government to buy back the Rosneft shares, directly or indirectly. The consortium alone controls the future ownership of these shares.”

“In structuring and completing the Rosneft transaction, QIA was advised by leading international law firms, accountants and investment bankers. Consistent with QIA policy, QIA and its advisors took care to ensure that the transaction was fully compliant with all US and EU sanctions and otherwise in accordance with all applicable laws and regulations.”

QIA also noted: “Qatar Investment Authority (“QIA”) is a global financial investor whose mandate is to generate returns over the long term for the benefit of the people of Qatar. QIA invests globally and across all asset classes with the objective of creating value. The investment in Rosneft is an opportunity to realise such value, and is fully aligned with the QIA’s broader investment strategy. ”

Glencore’s on-the-record statement to the WSJ reads: “The transaction did not include an option or agreement for Rosneft, Rosneftegaz or the Russian state to buy the stake or parts of the stake acquired by the Consortium.”

According to Reuters, Kremlin’s spokesperson also dismissed any claims that Rosneft might buy back its stake from the consortium as incorrect.

Offshore Energy Today Staff