Qatar to become Rosneft's third-largest shareholder

Qatar to become Rosneft's third-largest shareholder Photo: Max Pixel

Russia sold a 19,5% stake in Rosneft to a consortium formed by Switzerland-based mining company Glencore and the Qatar Investment Authority (QIA) fund at the end of 2016. It was supposed that CEFC China Energy will buy a $9,1 billion stake from the consortium, but the deal collapsed last week making QIA the third-largest shareholder of the Russian oil major.

According to the new deal, Qatar Investment Authority will own 18,93% of Rosneft, reports Bloomberg. Thus, the fund will become the company's third-largest shareholder after the Russian state, which holds 50%, and British BP with 19,75%.

The Glencore-QIA consortium jointly acquired a 19,5% stake in Rosneft in December 2016, when the Russian government performed a massive privatisation campaign. Later, the partners agreed to resell most of those shares to CEFC. However, last week it was announced that the deal would be cancelled. The reasons for the cancellation were not revealed in a statement issued by Glencore, but CEFC has faced numerous problems after its head Ye Jianming was detained by Chinese authorities in February.

Ye has transformed the Chinese conglomerate, which earlier focused mainly on the former Soviet Union, into a noticeable player on the world energy stage. Founded as a small trading company in 2002, CEFC acquired oil and gas assets all over the world including storage, terminals, refineries and oil fields, as well as financial units. The conglomerate has come under increasing government scrutiny in Beijing, while the group's intense international expansion had stretched it financially.

Nonetheless, according to Rosneft's spokesperson Mikhail Leontyev, the company's five-year oil supply agreement with CEFC, signed last year, remains in force. China will continue to remain a strategic market for Rosneft, the company's press service emphasised. Rosneft is also looking forward to ''new mutually beneficial bilateral and international projects with our Qatari partners''.

President Vladimir Putin with Emir of Qatar Sheikh Tamim bin Hamad Al Thani, 2016. Photo: kremlin.ru

As for the Glencore-QIA venture, it will now be dissolved. Glencore will keep a 0,6% stake in Rosneft and get about $4,4 billion from QIA for the shares the latter is acquiring. Glencore's deal to buy 220,000 bpd of oil from Rosneft remains in place.

QIA's considerable stake in Russia's largest oil company, which produces more oil than any other publicly traded company in the world, cements Doha's links with Moscow, while Qatar is facing increasing isolation from Saudi Arabia and other Gulf countries. At the same time, the Kremlin loses the prospect of China becoming a major investor in the Russian oil industry.

By Anna Litvina