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Qatar’s Fund Pays $4.2B To Become Rosneft’s Third-Largest Shareholder

Rosneft

Qatar Investment Authority will pay some US$4.2 billion (3.7 billion euro) for a 14.16-percent stake in Russia’s biggest oil producer Rosneft, thus becoming the third-largest single shareholder after the Kremlin and BP, the Russian company said on Tuesday.

The deal with the sovereign wealth fund of Qatar is the final episode of a saga in which a little-known Chinese company until that point, CEFC China, said in September last year that it had agreed with a consortium of Glencore and Qatar Investment Authority (QIA) the terms of sale of the consortium’s 14.16-percent stake in Rosneft.

However, in March this year, Chinese authorities started investigating the chief executive of CEFC China Energy, Ye Jianming, on suspicion of economic crimes. The investigation was part of a wider crackdown on private Chinese businesses after President Xi Jinping’s government warned that no Chinese billionaire, no matter how well-connected, is safe from scrutiny and investigation.

The investigation and troubles of CEFC China Energy raised concerns over the agreement that it had signed to buy 14 percent in Rosneft from Glencore and QIA.

In early May, Glencore said that the Glencore-QIA consortium notified CEFC of the termination of the agreement, and the 14.16-percent stake in Rosneft that the Chinese company was to buy would be transferred to a wholly owned subsidiary of QIA. The Qatari investment vehicle will end up holding 18.93 percent in Rosneft and become its third-largest shareholder behind the Russian government and UK supermajor BP. Glencore will retain 0.57 percent in Rosneft.

In September this year, Glencore said that the transaction in which the Glencore-QIA consortium was selling the 14-percent stake in Rosneft to a wholly owned unit of QIA had been completed.

As of October 1, 2018, Rosneft’s top three shareholders were JSC Rosneftegaz—which is 100-percent owned by the federal government—with a 50-percent stake, the Russian unit of BP with 19.75 percent, and the Qatari fund’s subsidiary QH Oil Investments LLC with 18.93 percent.

By Tsvetana Paraskova for Oilprice.com

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  • Dan on November 07 2018 said:
    Protection from Saudi Arabia.
  • Mamdouh G Salameh on November 06 2018 said:
    The Qatar Investment Authority (QIA) has been very astute in its choice of overseas investments. The acquisition of 18.93% stake in Russia’s biggest oil producer Rosneft is a masterstroke that not only makes it the third biggest investor in Roseneft after the Russian government (50%) and BP (19.75%) but also enhances Qatar’s presence in the global oil market.

    Qatar is also expanding its LNG production capacity by 23% from 77 million tons to 100 million tons which will enable it to maintain its position as the World’s biggest producer and exporter of LNG.

    Compare the QIA’s vision with that of Norway’s sovereign fund, the biggest in the world which is trying to dump its oil and gas stocks most probably to cosy up with the environmental lobby.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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