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Sun 11 Dec 2016 12:19 PM

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Russia signs $11.37bn Rosneft deal with Qatar, Glencore

Deal suggests the lure of taking a share in one of the world's biggest oil companies outweighs the risks associated with Western sanctions imposed on Russia over the conflict in Ukraine

Russia signs $11.37bn Rosneft deal with Qatar, Glencore
Russian President Vladimir Putin (L) listening to Rosneft CEO Igor Sechin during a meeting at the Kremlin in Moscow. (Photo: ALEXEY DRUZHININ/AFP/Getty Images)\n

Russian state holding company Rosneftegaz has signed a deal with the Qatar Investment Authority (QIA) and commodities trader Glencore to sell a 19.5 percent stake in state-owned oil major Rosneft.

The deal was announced by Rosneft Chief Executive Igor Sechin in a meeting with President Vladimir Putin on Wednesday.

Its success suggests the lure of taking a share in one of the world's biggest oil companies outweighs the risks associated with Western sanctions imposed on Russia over the conflict in Ukraine.

Rosneft said the Russian state budget will receive 710.8 billion roubles ($11.37 billion) from the sale, including 18.4 billion roubles in additional dividends from Rosneftegaz. It said the additional dividends from Rosneftegaz were due to a change in Rosneft's own dividend policy.

Italy's Intesa and a syndicate of banks are to provide Qatar and commodities trader Glencore with 7 billion euros of financing to buy the stake in Rosneft, a source said on Sunday.

Intesa will provide "significantly over 50 percent" of the financing, while Glencore will hedge the bulk of its stake in Rosneft, the source added.

Rosneft is preparing to become a shareholder in the Zohr gas project and expects Qatar and Glencore to be partners for many, many years, the source also said. 

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