LONDON/MOSCOW: Qatar is taking a nearly 19 per cent stake in Rosneft, rescuing the Russian oil major from its stalled deal to sell a major stake to China’s CEFC. Qatar’s sovereign investment fund QIA initially bought 19.5 per cent in Rosneft together with Swiss trading giant Glencore for 10.2 billion euros ($12.2 billion) during the Russian firm’s partial privatisation in 2016. But last year the consortium agreed to sell a 14.16 stake in Rosneft to CEFC China Energy in a $9.1 billion deal that was seen as key to helping expand relations between Russia and China, the world’s top energy exporter and top consumer.
That deal ran into trouble after CEFC Founder and Chairman Ye Jianming was put under investigation by Chinese authorities over suspected economic crimes, Reuters reported in March. Glencore said on Friday that the consortium that had been selling the Rosneft stake had been dissolved, and said Qatar and Glencore would now own stakes directly. QIA would control an equity stake of 18.93 per cent and Glencore would hold some 0.57 per cent. CEFC has not commented publicly since the termination of the deal was announced. The company did not immediately respond to Reuters requests for comment. Calls to its Shanghai headquarters were not answered on Saturday.
The once high-flying conglomerate is now conducting fire sales of its assets following the investigation into its chief and offering staff severance packages after failing to pay them for two months, as creditors scramble to collect debts amid growing regulatory scrutiny of the firm. “CEFC China’s purchase of a stake in Rosneft has ended in a debacle. Russia’s pivot to the East now feels more like a pivot to the Middle East, with Qatar coming to the rescue,” said Christian Boermel, senior research analyst, Russia Upstream, at energy consultancy Wood Mackenzie.
Rosneft was hit hard by US sanctions on Russia over Moscow’s annexation of Crimea and incursion in east Ukraine. But sources close to QIA have said Rosneft could prove a profitable long-term investment given the giant firm is worth only $65 billion despite producing more crude than US ExxonMobil, which is worth $324 billion. — Reuters
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