As concerns about global oil…
South America’s offshore oil boom,…
Presidential aid Andrey Belousov said on Thursday that the Russian government could not sell its stake in Rosneft on the public market, according to Russian news agency, TASS.
Andrey Belousov, who is also the chairman of Rosneft’s board of directors, said that selling the government-owned stake to two strategic investors would be the best way to privatize Rosneft, although it is possible that one strategic investor could purchase the government’s stake, but would have to come in at a fair market price, plus a premium.
“Considering that it is planned to sell 19.5%, I think it would be appropriate if there are two investors, not only one investor, because it is quite a big package and these should be strategic investors,” he said.
Related: OPEC Head Calls for $65 Oil
Rosneft has had tough times as of late, with its 25-year deal—previously valued at $270 billion— to supply oil to China National Petroleum Corp (CNPC) now at risk as crude prices are still low. These prepayment contracts have been a major source of alternative financing for Rosneft.
Russian Deputy Energy Minister Alexei Teksler said that state-run CNPC was interested in acquiring a piece of Rosneft. China confirmed its interest in securing its long-term oil supply.
Related: Would Regulated Oil Prices, Argentine-Style, Help U.S. Shale?
Just last week, Russian authorities greenlighted the sale of 50 percent of another state-run oil company, Bashneft after Russia removed it from its list of strategically approved assets. Bashneft is Russia’s sixth largest crude oil producer, valued at $13 billion pre-oil slump.
Another Russian state-owned oil-related company that is being considered for partial sale is pipeline Transneft.
The sale of its oil assets comes as Russia finds itself strapped for cash with a possible budget deficit of $21 billion in 2016.
By Julianne Geiger for Oilprice.com
More Top Reads From Oilprice.com:
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.