The following is an excerpt from Elena Mazneva Dina Khrennikova Anna Baraulina | June 19, 2016 | Bloomberg.com |
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 re-election bid in less than two years.
Russia is seeking buyers for 19.5 percent of state oil champion Rosneft OJSC and would prefer a joint deal with the two nations leading the growth in global energy demand, two people familiar with the matter said. Officials in Moscow expect to raise at least 700 billion rubles ($11 billion) from the sale, which would set a privatization record for the country.
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 U.S. and Europe to a post-Cold War low. It would also balance the near 20 percent stake that London-based BP Plc acquired in a landmark deal in 2013, a year 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, but neither side has said whether a joint deal is being considered. On Friday, though, Indian Oil Minister Dharmendra Pradhan said one couldn’t be ruled out.
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