Russian authorities have greenlighted the sale of 50 percent of the Russian state oil company Bashneft after it excluded the company from a list of strategically important assets.
Russian Economic Development Minister Alexey Ulyukayev said the privatization of the mid-size oil company could be completed within two months.
Bashneft is Russia's sixth-largest crude oil producer, with total proved reserves of 2.15 billion barrels and probable reserves of 653 million barrels. Before the oil slump started in the summer of 2014, Bashneft was valued at up to $13 billion.
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Russia is in need of a cash injection, and in January the authorities said they were considering partial privatization of some other assets in which it owns shares, including other oil major Rosneft, diamond producer Alrosa, VTB bank and Sovcomflot. Still, the government hopes that Bashneft would be easier to sell than other state enterprises, as it is a listed company.
Bashneft was nationalized only two years ago, and the government now owns a 50 percent plus-one stake. The government announced it may move to sell either a 50 percent-plus stake or go for a stock market offering of 25 percent.
The regional government in the Russian republic of Bashkortostan is holding another 25 percent, and it's not planning on selling-a stance that could scare away potential investors.
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However, back in February, Russian Lukoil said it was eyeing the state's 50-percent stake in Bashneft, with local media reporting that the company had already entered into unofficial talks with the authorities. However, Lukoil officials now say the company will not even consider buying a 25 percent stake in Bashneft.
Still, an acquisition of a stake in Bashneft would make sense for Lukoil, which already partners with the state-owned company in the Trebs and Titov oil fields, which hold some 1.1 billion barrels of estimated reserves. Lukoil is also the largest supplier of oil to the Bashneft refinery.
By James Burgess of Oilprice.com
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