Qatars sovereign wealth fund - the Qatar Investment Authority (QIA) - and commodities trader Glencore are jointly buying a 19.5 per cent stake in Rosneft, Russias largest oil company
With the consortium paying $11.3bn for the stake in Rosneft, this is the largest foreign investment in Russia since the Ukraine crisis. The Russian government has been driven to sell some state assets in order to balance the budget amid a two-year recession brought on by sharply lower global oil prices and Western sanctions.
Glencore said it would commit euros300 mn in equity, with the rest coming from QIA, which is also Glencore’s largest shareholder, and bank financing. Russia retains a controlling stake in Rosneft, while BP owns 19.75 per cent.
As part of the deal, Glencore will sell 220,000 bpd of Rosneft oil for five years. Despite only committing a relatively small amount of funding, Glencore expects "additional opportunities, through a strategic partnership for further cooperation, including infrastructure, logistics and global trading." The company has long had ties with Russia as it already trades significant amounts of Russian oil and with stakes in the country's aluminium giant Rusal and oil producer Russneft. The deal also marks a turnaround for Glencore a little over a year since the company was forced to raise cash from shareholders and sell assets to cut its huge debt following the slump in commodity prices.
In a press release Glencore said the deal was still in “final-stage negotiations” but a further announcement would be made in due course.
