Energy industry

19.5% of Rosneft shares will be sold till 05 Dec 2016

The Russian government intends to sell 19.5% stake of Rosneftegaz in Rosneft till December 05, 2016, and “not later than December 31, 2016, the money should be transferred to the budget of the Russian Federation in the form of dividends from Rosneftegaz”, – said the Minister of Economic development of Russia Alexei Ulyukayev. According to November 03, 2016 government’s order on the minimum value of this deal, the authorities expect to receive the amount of at least 710.8 billion rubles (748,26 billion minus 5% discount).

It was expected that Sinopec, the Kazakh KazMunaiGaz, Surgutneftegaz or LUKOIL can fight for Rosneft shares. But the latest has already announced that it would not participate in the privatization, and the rest are unlikely to do it this year.

The idea of privatization of the world’s largest a public company on the volume of oil production appeared in the November 2014. This was preceded by the introduction of sanctions against Rosneft by the US Treasury Department and the appeal of the company’s President Igor Sechin to the government for financial assistance in the amount of 1.5 trillion rubles. Then Russian government decided to realize 19.5% of 69.5% shares of Rosneft owned by them at a price not lower than their initial public offering. Thus, the state’s participation in the company was reduced to 50% + 1 share.

According to Russian media, towards the end of 2016, the Russian government has intensified the issue of privatization of the largest oil companies. The budget deficit forced to accelerate this process, which arose due to the sharp increase in government spending on defense in 2016. And this privatization deal should allow the authorities of the country to handle with the financial imbalance.

Sources:

Russian Ministry of Economy, Vedomosti, Government of Russia, TASS, Vedomosti, Kommersant, Vedomosti