The board of directors of Russian oil giant Rosneft is recommending the payment of a record high annual dividend for 2021, which will benefit the Russian government the most, considering the fact that it holds the highest stake in the oil firm.
Rosneft’s board recommended on Monday that the company pay $0.38 (23.63 Russian rubles) per share for the second half of last year, which would mean the full-year 2021 dividend would be at a record $0.68 (41.66 rubles) per share.
Rosneft booked a sixfold jump in its 2021 net income, which surged to a new record, but was below the expectations of some analysts.
The earnings release was made two weeks before Russia invaded Ukraine and prompted BP—Rosneft’s second-biggest shareholder behind the government—to announce it would be selling its 19.75-percent stake in the company.
The other Russian energy giant, Gazprom, also proposed record annual dividends for 2021 earlier this month. The total dividend payout from Gazprom to its shareholders would be at a record high in the history of the Russian stock market, said Gazprom, which plans to pay $20.18 billion (1.244 trillion rubles) in total dividends for last year, or 50 percent of its adjusted net income for 2021.
The Russian state is the biggest beneficiary in this case, too, since Gazprom is owned by the government.
However, foreign investors in the Russian oil and gas giants may find it difficult to actually receive the dividends they are owed because of the Western sanctions on Russia and the financial restrictions on the major energy firms and the Bank of Russia, the central bank.
Per a decree by Vladimir Putin in March, Russian firms will have to transfer money owed to banks and investors from Russia’s list of so-called “unfriendly” countries—including most of the Western countries—to bank accounts in Russian rubles, while funds from those accounts could be moved only by special permission.
By Tsvetana Paraskova for Oilprice.com
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And since the Russian government holds the highest stake in both, it will be the biggest beneficiary.
However, foreign investors in the Russian oil and gas giants may have to wait a long time before they receive their dividends because of the sanctions and even when they receive them, they will be transferred to them in rubles.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London