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Russia’s state-controlled oil giant Rosneft plans to pay 50 percent of its net profit as dividends to shareholders starting from the 2017 results, chief executive Igor Sechin said at the shareholders’ meeting on Thursday.
The plan would be submitted to the government soon, Sechin said.
Just days before the annual shareholders’ meeting, Russia’s President Vladimir Putin received Sechin at the Kremlin, and asked Sechin to consider paying 50 percent of the dividends based on net income, as carried by a press statement from the Kremlin.
“We can’t change dividends on 2016 results, the president knows our dividend policy. It's only about future,” Rosneft spokesman Mikhail Leonvtiyev told Reuters earlier this week, commenting on the dividend proposal.
Rosneft’s current dividend policy says that “the target level of dividend amount is to at least 35% of Rosneft's net profit in accordance with International Financial Reporting Standards. Furthermore, the dividends are to be paid on the twice a year minimum target frequency basis.”
Also speaking to shareholders, Sechin said that Rosneft expects to add 20 million tons to refining output this year after it bought a large stake in India’s Essar Oil. The transaction has been delayed due to the Indian company’s creditors delaying their approval of the deal, but Sechin said on Thursday that the deal is now complete.
“Please be informed that the legal decision was received yesterday, which guarantees the entry of the company in Essar Oil’s capital,” Sechin told shareholders, as reported by FT.
As of early May, six Indian creditors of Essar Oil had not yet approved the US$12.9-billion acquisition of the Indian company by Rosneft and Trafigura, calling into question the proposed June closing date. Rosneft first announced the deal to buy 49 percent in Essar Oil in October 2016.
Further speaking to shareholders, Sechin said that Rosneft has approved investments exceeding US$16.6 billion (1 trillion rubles) under its 2017-2018 investment program, with new projects expected to account for more than half of investment.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.