Russia sold its stake in the largest oil producer in the country to commodity trader Glencore Plc and Qatar's sovereign wealth fund. The 19.5% stake was taken by Glencore and Qatar for $11.5 billion. The controlling stake will remain with Moscow.
"It is the largest privatisation deal, the largest sale and acquisition in the global oil and gas sector in 2016," President Vladimir Putin said.
The deal announcement which was just made by President Vladimir Putin pushed through despite the sanctions of U.S. and European Union against Russia. Likewise, it is the biggest foreign investment in the region since the crisis in Ukraine.
More so, in a televised meeting with Rosneft Chief Executive Igor Sechin, President Putin said that the deal follows a rally in global oil prices after Opec's decision to cut production.
Although the government of Russia is not a member of Opec, the president agreed cut its output in line with the cartel.
Furthermore, the deal also marks the return of Glencore CEO Ivan Glasenberg to deal-making. This comes more than a year after the company was forced to raise cash from shareholders.
The said sale is part of the government's efforts to sell several state assets as it aims to balance the budget amid a two-year recession. The economic issue was the result of the drop in global oil prices and Western sanctions.
There were 30 potential bidders which Roseneft held talks with before striking the deal.
Glencore said that it would finance 300 million euros for the deal, and the rest will be coming from the Qatar Investment Authority.
"The negotiated price is in our view the maximum possible with the minimum discount of five percent to market prices," Sechin exclaimed and said.
The sale is said and already in the final stage of negotiations and is expected to close mid-December.
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