Putin considers sale of Rosneft stakes to India, China

DAILY SABAH
ISTANBUL
Published 21.06.2016 00:28

Russian President Vladimir Putin reportedly plans to sell a 19.5 percent stake of state-owned oil company Rosneft to Indian and Chinese companies due to difficulties in meeting expenditure commitments prior to his presidential candidacy before elections that will be held in less than two years.

According to BloombergHT, two unidentified sources suggested that Russia is considering selling a 19.5 percent stake of Rosneft OJCS, and the country prefers a joint deal with two leading countries in supplying the global energy demand. Officials in Moscow expect to get at least 700 billion rubles ($11 billion) from the sale, which would set a privatization record for the country.

Bringing together two of Asia's top-three economies in Rosneft, which produces more oil than Exxon Mobil Corp., may help Putin cover the budget deficit, and it could increase the country's geopolitical power in a period when the conflicts in Ukraine and Syria brought relations with the EU and Europe to the post-civil war's lowest level. This deal may also provide balance for the 20 percent stake purchased by London-based BP Plc. in 2013, one year before the increasing Russian conflict with its neighbor Ukraine along with its annexation of Crimea.

China and India have recently expressed interest in Rosneft as a step to strengthen their operations in Russia, the world's largest exporter, but none of the parties have clarified whether they are considering a joint deal. Indian Petroleum and Natural Gas Minister Dharmendra Pradhan, on the other hand, said on Friday that this option would not be neglected.

Rosneft is currently 69.5 percent owned by the Russian state. It is headquartered in Moscow near the Kremlin, across from the Moskva River. Rosneft became Russia's leading extraction and refinement company after purchasing assets of former oil giant Yukos at state-run auctions.

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