Surprise News for Russia’s Largest Oil Company
Today the Kremlin announced that commodities trader Glencore, and Qatar’s sovereign wealth fund are buying a 19.5% stake in Russia’s largest oil company, Rosneft. The surprise move will see Glencore and Qatar paying 11.3bn USD for the stake in Rosneft, where BP already own 19.75%. Moscow retains the controlling stake.
"It is the largest privatization deal, the largest sale and acquisition in the global oil and gas sector in 2016," said President Vladimir Putin.
The deal marks a turnaround for Glencore, who had seen a drop in its share price amid a plan to sell assets and cut its debts. Their share price has rebounded this year, and Glencore issued a statement detailing that it would finance part of this deal by putting up 300m EUR of its own equity, with the rest financed by banks and the Qatari sovereign fund. QIA has yet to make a statement on the deal.
The long-planned sale is part of efforts by the Russian government to sell some state assets to help balance the budget after a two year recession caused by the drop in global oil prices, and western sanctions.