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Flurry Of Bearish News Sends Oil Lower

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Renewed demand concerns are spooking…

Russian Economy Minister Charged With Bribery

Ulyukaev Russia

Russia’s Economy Minister Alexei Ulyukayev has been detained on charges of bribery after an ongoing investigation caught him in the act of receiving US$2 million as reward for his ministry’s green light for Rosneft’s acquisition of Bashneft.

According to an unnamed source from law enforcement, Ulyukayev has been the object of a Federal Security Service investigation for more than a year, although it is not clear yet whether the investigation was prompted by suspicions of graft.

The state Investigative Committee said in a statement that the minister was detained after he was caught receiving US$2 million for his ministry’s positive assessment of the Rosneft-Bashneft tie-up. Ulyukayev is currently awaiting charges.

Soon after the news about Ulyukayev’s detention came out, the Investigative Committee said the acquisition of Bashneft will not be subject to any actions on their part. The deal was legal, the committee’s spokeswoman Svetlana Petrenko told media.

The tie-up between Rosneft and Bashneft sparked controversy earlier this year. Bashneft was put up for sale as part of a privatization plan devised by Ulyukayev himself. Rosneft and Lukoil emerged as the main suitors for their smaller sector player in the summer. In August, there were reports that Bashneft’s privatization would be delayed till 2017 because the Kremlin was not in favor of Rosneft buying it. At the same time, there were conflicts between Rosneft and Lukoil about their respective bids.

However, two months later, Rosneft received government approval for the acquisition of 50.075 percent in the smaller company. According to the Investigative Committee, Ulyukayev was the party that asked for the helfty “reward” for his role in the approval.

Meanwhile, Rosneft is preparing its offer for the remainder of Bashneft’s capital, as per regulations. The acquisition of the majority stake in the company cost it US$5 billion.

By Irina Slav for Oilprice.com

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