Russia Said to Ban Rosneft From Joining Bashneft Privatization

  • Other state companies also said to be forbidden from joining
  • Rosneft says it hasn’t been told it can’t participate

Russia intends to bar energy giant Rosneft PJSC and other state-owned companies from the planned privatization of regional oil producer Bashneft PJSC, according to two people with knowledge of the matter.

The issue was discussed in a meeting headed by Prime Minister Dmitry Medvedev a few weeks ago, one of the people said. The decision stands even after the government’s own consultant on the deal, VTB Capital, included Rosneft among potential buyers it had invited to participate, a second person said. Both people asked not to be identified as details of the discussions aren’t public.

RBC news service reported Thursday that President Vladimir Putin ordered the government to keep state-run companies out of the deal, citing people it didn’t identify.

A spokesperson for Medvedev declined to comment.

The Russian government is selling state assets as it seeks to plug a budget deficit after the collapse of crude prices sapped revenue from its biggest export. The state owns 50.08 percent of Bashneft, or 60.16 percent of ordinary voting shares, valued at about 244 billion rubles ($3.8 billion). It has said it plans to sell part or all of the stake this year.

Rosneft hasn’t received any instructions from the government forbidding it from participating, spokesman Mikhail Leontyev said by telephone Thursday. Rosneft is considering the matter following the invitation from VTB Capital and will of course follow directives of its main shareholder, the government, he said.

Russia nationalized Bashneft in 2014, taking the shares held by Vladimir Evtushenkov’s holding company AFK Sistema amid a money-laundering case against the billionaire. Bashneft’s management has proposed selling shares on the market, while officials are suggesting selling a controlling stake to strategic investors, according to Shuvalov.

Lukoil PJSC, Russia’s biggest non-state crude producer, has expressed an interest in buying a controlling interest, while saying Bashneft is overvalued now, valuing the whole company at about $4 billion.

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