Qatar, Glencore Buy 19.5% Stake in Rosneft

Russian state holding company Rosneftegaz on Saturday signed a deal with the Qatar Investment Authority (QIA) and commodities trader Glencore to sell a 19.5% stake in state-owned oil major Rosneft.

The privatization deal, which Rosneft Chief Executive Igor Sechin called the largest in Russia's history, was announced by Rosneft in a meeting with President Vladimir Putin on Wednesday, CNBC reported.

Its success suggests the lure of taking a share in one of the world's biggest oil companies outweighs the risks associated with western sanctions imposed on Russia over the conflict in Ukraine. Rosneft had been under pressure to secure a sale of the 19.5% stake to help replenish state coffers, hit by an economic slowdown driven by weak oil prices and exacerbated by sanctions.

Rosneft said in a statement the budget would receive $11.37 billion from the sale, including $290 million in additional dividends from Rosneftegaz.

It said the additional dividends were due to a change in its dividend policy, according to which it will pay at least 35% of net profit, according to international accounting standards in payouts twice a year. Sechin called QIA and Glencore "strategic investors" in the Rosneft statement and said he was confident their work together would lead to synergies for Rosneft.

Rosneft confirmed that Italian bank Intesa Sanpaolo was a major creditor for the deal and said it would be closed by the middle of December.

Italy's Intesa and a syndicate of banks are to provide Qatar and commodities trader Glencore with $7.3 billion of financing, a Rosneft source said on Sunday.

Intesa will provide significantly over 50% of the financing, while Glencore will hedge the bulk of its stake in Rosneft, the source added. Rosneft is preparing to become a shareholder in the Zohr gas project and expects Qatar and Glencore to be partners for many, many years, the source also said.

The deal signing came as Russia and other oil producers thrashed out an agreement with the Organization of Petroleum Exporting Countries last week to cut output. But a Rosneft spokesperson said that the deal with Qatar, an OPEC member, had "no connection to OPEC and the agreements between Russia and OPEC."