Rosneft PJSC, Russia’s most acquisitive oil producer, may yet be able to bid in the government’s sale of Bashneft PJSC, despite indications that state companies would be barred from the sale.
“From a formal point of view, it isn’t a state company, one can say that straight away, but without a doubt there are different points of view on the issue,” Kremlin spokesman Dmitry Peskov told journalists yesterday.
The government has said it plans to sell part or all of its stake in Bashneft this year and is also weighing a sale of Rosneft as it disposes of assets to help plug a deficit after the collapse in crude prices sapped revenue. A meeting headed by Prime Minister Dmitry Medvedev concluded that the privatisations shouldn’t be open to government companies, including majority state-owned Rosneft, two people with knowledge of the matter said last week.
Even after that meeting, Rosneft told the government’s consultant on the Bashneft deal, VTB Capital, that it’s potentially interested in buying a stake, newswire Interfax reported yesterday. Rosneft spokesman Mikhail Leontyev declined to comment on the report.
Kremlin-approved acquisitions have enabled Chief Executive Officer Igor Sechin, a long-time ally of President Vladimir Putin, to build Rosneft from a bit player into the world’s largest traded crude producer. The company acquired assets from Yukos Oil Co in forced auctions and then bought BP’s venture TNK-BP in 2013.
In 2014, Russia nationalised Bashneft, taking the shares held by Vladimir Evtushenkov’s holding company AFK Sistema amid a money-laundering case against the billionaire. The state owns 50.08%, or 60.16% of ordinary voting shares, valued at about 248bn roubles ($3.7bn).
Rosneftegaz, a structure fully owned by the Russian government, owns a 69.5% share of Rosneft, BP holds 19.75%, and most of the remaining shares are in free-float, according to Rosneft’s website.
Russia may gain greater value by allowing Rosneft to acquire Bashneft and then selling stakes in the combined company, Otkritie analysts Artem Konchin and Mitchell Jennings said in an e-mailed note last week. Rosneft is valued at a premium to Russian peers, suggesting Bashneft would get a boost if it were part of a combined entity, the analysts wrote.
While state-run companies shouldn’t make purchases in privatisation auctions, here is no formal decree banning them from bidding, Kremlin spokesman Peskov told journalists by telephone.