Rosneft privatisation next after Sechin wins $5bn battle for Bashneft

Russian Prime Minister Dmitry Medvedev yesterday gave into pressure from his boss President Putin and signed off on Rosneft’s $5.3bn bid for a controlling stake in the smaller state-owned oil enterprise Bashneft oil – and then instructed that the government should sell off its 19.5% share in the larger company by the end of the year. The transfer of its Bashneft shareholding is expected to be finalised by the weekend. 
Rosneft is already Russia’s – and one of the world’s – largest oil companies, and the acquisition of Bashnet will add a further 180 oil fields with a combined annual production capacity of 19 million tons a year to its assets.
Medvedev had earlier strongly opposed Rosneft’s participation in its sale, and even President Putin had expressed reluctance, admitting that “ It’s  probably not the best option when one company under state control acquires another purely state company”; but, with the Kremlin under increasing pressure to tackle its mounting budget deficit, both men have given in to the persuasive powers of Putin’s long-term ally and Rosneft CEO Igor Sechin.
Bob Dudley, the CEO of BP which owns 19.75% of Rosneft, appears to be relaxed about the situation  and said that he did not oppose the deal – but also stated that  the British company would not be taking part in the forthcoming Rosneft privatisation. 
Earlier, Economy Minister moved to scotch rumours that Rosneft might attempt to buy back its own shares from the government. “No buybacks are envisaged,” he insisted. The company’s largest stakeholder is currently the state-owned oil transportation agency Rosneftegaz with a 69.5% stake.
In September, Reuters reported that Moscow was hoping to raise $11bn through the sale.

Source: www