Russia Considers Selling 19% of Rosneft in 2013, Belousov Says

Russia is considering the sale of 19 percent of OAO Rosneft this year, leaving a controlling stake in the world’s biggest publicly traded oil producer in the state’s hands, according to Economy Minister Andrei Belousov.

The Rosneft stake offered would be on top of stock that BP Plc (BP/) bought last month, Belousov told reporters today in Moscow.

Russia plans to raise 427 billion rubles ($14 billion) this year in asset sales to help balance the budget, Finance Minister Anton Siluanov said in March. Rosneftegaz, the state holding company where Sechin is chairman, still has the $4.87 billion it received for selling 5.66 percent of Rosneft to BP as part of the TNK-BP deal, Belousov said.

Prime Minister Dmitry Medvedev’s government is seeking cut the state’s stake in Rosneft and reduce its weight in the economy. Rosneft Chief Executive Officer Igor Sechin, who oversaw the company’s $55 billion takeover of TNK-BP this year and the acquisition of oil assets from bankrupt Yukos previously, has urged a delay.

“We’re talking about an additional stake and here we have to make our decision taking into account the subsoil resources law,” Belousov said. “The possibility exists and we must make a decision.”

By law, a controlling 50 percent plus one share in Rosneft must remain in state hands, he said.

Global Competitor

The government said in June last year that it would aim to sell out of Rosneft by 2016. First Deputy Prime Minister Igor Shuvalov, in a January interview, gave a more conservative estimate of the state reducing its stake to less than 50 percent by 2020.

At least 5 percent of the oil producer may be sold this year or next, or more if a strategic investor shows interest and helps build the company into a global competitor, Shuvalov said.

Sechin has opposed any Rosneft sale for the sake of cutting the state’s stake, calling for a decision to be based on price. He described the oil producer as “our teddy bear,” inspiring possessive feelings like a child’s for a favorite toy, the Financial Times reported after an Oct. 5 meeting with investors in London.

To contact the reporter on this story: Stepan Kravchenko in Moscow at skravchenko@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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