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A fifth of Rosneft sold

December 7, 2016

Commodities trader Glencore and Qatar's sovereign wealth fund are together buying a fifth of state-controlled Russian oil company Rosneft. It's the sector's largest privatization deal for the whole of 2016.

Russland Ölgesellschaft Rosnet
Image: picture-alliance/dpa/Y. Kochetkov

Russia finalized a deal to privatize 19.5 percent of state-owned oil giant Rosneft, the Kremlin announced Wednesday.

It added the investors involved were the Glencore Consortium and Qatar's sovereign fund, which were to have equal stakes in the Russian company.

"It's the largest privatization deal, the largest sale and acquisition in the global oil ad gas sector in 2016, Russian President Vladimir Putin told a meeting with Rosneft CEO Igor Sechin in Moscow.

Putin said he hoped the new investors would help improve Rosneft's governance ad transparency and would raise its market value.

Welcome budgetary support

The move came as oil prices had soared to more than $50 a barrel after OPEC members last week hammered out a deal to cut output for the first time in eight years.

Russia’s Rosneft says no to OPEC oil cut

The Russian government will keep a controlling stake of more than 50 percent, with 10.5 billion euros ($11.3 billion) from the sale of the stake to boost the national budget.

Moscow said it would prepare a scheme for foreign currency conversion to avoid financial market volatility that could otherwise be caused by large volumes of cash from the deal entering the financial system.

hg/jd (Reuters, AFP)