• 1 hour Canadia Ltd. Returns To Sudan For First Time Since Oil Price Crash
  • 3 hours Syrian Rebel Group Takes Over Oil Field From IS
  • 3 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 3 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 3 days New Video Game Targets Oil Infrastructure
  • 3 days Shell Restarts Bonny Light Exports
  • 3 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 3 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 4 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 4 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 4 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 4 days Rosneft Signs $400M Deal With Kurdistan
  • 4 days Kinder Morgan Warns About Trans Mountain Delays
  • 4 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 5 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 5 days Conflicting News Spurs Doubt On Aramco IPO
  • 5 days Exxon Starts Production At New Refinery In Texas
  • 5 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 6 days China To Take 5% Of Rosneft’s Output In New Deal
  • 6 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 6 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 6 days VW Fails To Secure Critical Commodity For EVs
  • 6 days Enbridge Pipeline Expansion Finally Approved
  • 6 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 6 days OPEC Oil Deal Compliance Falls To 86%
  • 7 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 7 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 7 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 7 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
Can India Overtake China In The EV Revolution?

Can India Overtake China In The EV Revolution?

India wants to drastically increase…

Are Oil Markets Becoming Immune To Geopolitical Risk?

Are Oil Markets Becoming Immune To Geopolitical Risk?

The geopolitical risk premium in…

Moscow Delays Bashneft Privatization for 2017

Rosneft Storage tanks

The planned sale of a majority stake in state-owned oil company Bashneft has been postponed until 2017. Among the reasons cited for the decision was the unfavorable oil market as well as a conflict between the two main bidders for the stake: Rosneft and Lukoil.

According to Bloomberg, the Kremlin was not in favor of Rosneft acquiring its smaller peer, although no details emerged as to what the reason for this stance was. Russian daily Kommersant, however, reports that the final decision for the delay of the stake sale was prompted by a conflict between Rosneft and Lukoil related to their respective bids for Bashneft.

Kommersant cites a federal government official as saying that the decision for the delay was made by the PM, Dmitriy Medvedev, because the situation around the bidding process had become too tense, creating conflicts between government and presidential officials. Kommersant’s source added that the main problem was President Putin’s position: he had not made it clear one way or the other at the meetings that discussed the pros and cons of a stake sale.

It looks like Rosneft and Lukoil were in a heated bidding war, with Lukoil emerging as the winner. Bloomberg, however, cited Russia’s largest private oil company as saying the stake was overvalued in the current market environment. This may well be a defense reaction, since Kommersant’s sources believe the delay is in fact a victory for Rosneft and a direct result of the efforts of Igor Sechin, its chief executive to tip the scales in favor of Rosneft.

Earlier, when reports emerged that Putin doesn’t want Rosneft to win the bid for Bashneft, media said that Sechin’s main argument was that the acquisition would make Rosneft itself a much tastier morsel – Moscow is putting up for sale 20 percent of the state giant. If those who say the delay is a direct result of Sechin’s actions are right, then we may indeed see a bigger and more expensive Rosneft next year.

If it’s the current market environment that is to blame for the delay, then the bidding war may be delayed even longer, if prices don’t recover sufficiently.

Moscow is selling 50.08% in Bashneft as part of efforts to plug its budget hole. The deal has been valued at about 315 billion rubles (US$5 bln).

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