Glencore, QIA may take €10.2bn Rosneft stake

GLENCORE says that it and the Qatar Investment Authority (QIA) are in final negotiations to take a 19.5% stake in Rosneft for €10.2bn (US$10.8bn).

The mining and commodities firm contradicted a statement released earlier by the Kremlin about a meeting during which Russia’s President Vladimir Putin congratulated Rosneft president Igor Sechin on the conclusion of the deal and asked him to invite Rosneft’s new shareholders to Russia for a government reception. The deal is set to be the largest ever privatisation deal in Russia. In a Kremlin statement that includes the transcription of the conversation between the two men, Sechin confirmed the signing of the deal.

“This transaction is not a simple portfolio investment but a strategic deal with additional elements, such as the signing of a long-term offtake agreement with Glencore, the coordination of our market positions and the creation of a joint venture, which will work both in Russia and under international projects,” he told Putin.

Glencore confirmed that a 5-year offtake agreement with Rosneft for 220,000 bbl/d is part of the “proposed transaction”, while they are also looking at other opportunities including a strategic partnership for further cooperation in areas such as infrastructure, logistics and global trading. Glencore will commit €300m in equity, with the remainder of the financing coming from QIA and bank financing.

“Once the transaction is entered into, it will be conditional on the subsequent finalisation of all relevant financing, guarantee and other agreements and would be expected to close in mid-December. A further announcement will be made in due course,” said Glencore.

The QIA has not released a statement about the deal.