• 30 mins British Utility Companies Brace For Major Reforms
  • 5 hours Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 7 hours Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 8 hours Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 9 hours OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 10 hours London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 11 hours Rosneft Signs $400M Deal With Kurdistan
  • 13 hours Kinder Morgan Warns About Trans Mountain Delays
  • 20 hours India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 1 day Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 1 day Russia, Saudis Team Up To Boost Fracking Tech
  • 1 day Conflicting News Spurs Doubt On Aramco IPO
  • 1 day Exxon Starts Production At New Refinery In Texas
  • 2 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 2 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 2 days China To Take 5% Of Rosneft’s Output In New Deal
  • 2 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 2 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 2 days VW Fails To Secure Critical Commodity For EVs
  • 2 days Enbridge Pipeline Expansion Finally Approved
  • 3 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 3 days OPEC Oil Deal Compliance Falls To 86%
  • 3 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 3 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 3 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 4 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 4 days Aramco Says No Plans To Shelve IPO
  • 6 days Trump Passes Iran Nuclear Deal Back to Congress
  • 6 days Texas Shutters More Coal-Fired Plants
  • 6 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 6 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 7 days Chevron Quits Australian Deepwater Oil Exploration
  • 7 days Europe Braces For End Of Iran Nuclear Deal
  • 7 days Renewable Energy Startup Powering Native American Protest Camp
  • 7 days Husky Energy Set To Restart Pipeline
  • 7 days Russia, Morocco Sign String Of Energy And Military Deals
  • 7 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 7 days China Set To Continue Crude Oil Buying Spree, IEA Says
Oil Fundamentals Overturn Geopolitical Risk

Oil Fundamentals Overturn Geopolitical Risk

Geopolitical risk from Iraq and…

Kremlin Bans Any Internal Rosneft Shareholder Deals Before Privatization

Rosneft storage

The Kremlin has banned Rosneft’s shareholders from closing deals among themselves before the privatization of as much as 20 percent in the state giant goes through, which may not take place this year, according to Economy Minister Alexey Ulyukaev.

The ban is most likely targeting BP, which is the only non-Russian big shareholder in the company with a 19.75-percent interest. The government owns 69.50 percent via Rosneftegaz, a state-owned company, and the National Settlement Depository holds 10.36 percent.

The stake sale has been prompted by the gaping deficit in Russia’s budget, caused by the persistently low oil prices. This year, the deficit is estimated to reach 4 percent of GDP, equal to around 1.5 trillion rubles, or some US$23 billion. The proceeds from the Rosneft privatization are seen at around US$10.5 billion.

The government is concerned, apparently, that BP could strike a deal with any of the prospective buyers to increase its control in the company and be able to block government decisions. Or, as analysts from Aton Capital said in a note, “We believe it wishes to avoid BP and the new strategic investor combining their efforts to oppose the government’s decisions. While this clause might dent the attractiveness of Rosneft’s stake to some extent, we deem the news neutral for Rosneft shares.”

Related: This Billionaire Could Change The Resource Industry Forever

This is the latest in a series of restrictions imposed by the Kremlin on different aspects of the future sale. These include a lock-up period of three years, an obligation for the successful buyer to vote for government officials that have been proposed to sit on the board of directors, and the absence of any pending debts or tax dues to the Russian budget.

The Rosneft stake sale is part of a wider privatization drive, including some of the largest state-owned businesses in the country, such as Alrosa’ the world’s largest diamond miner. A 10-percent stake in the company recently went for 52.2 billion rubles (US$804 mln).

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News