Putin Said to Weigh $11b Rosneft Sale to China, India

Putin Said to Weigh $11b Rosneft Sale to China, India
Putin Said to Weigh $11b Rosneft Sale to China, India

Russian President Vladimir Putin is considering selling part of Russia’s corporate crown jewels to China and India, as the president struggles to meet spending commitments before his possible reelection bid in less than two years.

Russia has been seeking buyers for 19.5% of state oil champion Rosneft and is now indicating for the first time it would prefer a joint deal with the two nations driving growth in global energy demand, two people familiar with the matter said.

Officials in Moscow expect to raise at least $11 billion from the sale, which would set a privatization record for the country. There’s “no single preferred option” for the deal, Kremlin spokesman Dmitry Peskov told reporters on Monday, Bloomberg reported. Bringing two of Asia’s three largest economies into Rosneft, which pumps more crude than Exxon Mobil Corp., would help Putin cover budget shortfalls while strengthening his geopolitical hand at a time when conflicts in Ukraine and Syria have driven relations with the US and Europe to a post-Cold War low.

It would also balance the near 20% stake held by London-based BP Plc, the bulk of which was acquired in 2013 before Putin stoked a separatist rebellion in neighboring Ukraine by annexing Crimea. China and India have both publicly expressed interest in the Rosneft sale, which would cement their footholds inside the world’s largest energy exporter, although neither side has said whether a joint deal is being considered.

“We are not rivals,” Pradhan said in an interview at Putin’s annual economic forum in St. Petersburg, adding that India’s Oil & Natural Gas Corp. and China National Petroleum Corp. already have joint projects and more would be nice. China has provided Rosneft and other Russian energy companies with more than $100 billion in loans and prepayments for supplies over the past decade, money that helped fund the acquisitions that turned the state-run company into the world’s largest publicly traded oil producer by output three years ago.