By December 5, 2016 Read More →

Rosneft offers $9.4B in local bonds and eyes Egyptian investment

Rosneft opened a $9.4 billion bond sale on Monday to raise money to fund foreign projects. Reuters file photo by Maxim Shemetov.

Rosneft board considering 35 per cent stake in Eni’s Egypt project

 By Katya Golubkova and Oksana Kobzeva

MOSCOW, Dec 5 (Reuters) – Russian oil firm Rosneft opened the books for a 600 billion rouble ($9.4 billion) bond sale on Monday to raise money for foreign projects, and said it was interested in an offshore concession in Egypt.

The bond issue is its first in two years and part of a wider 1.071 trillion rouble programme approved last month.

The company said in a separate statement that its board plans to discuss buying a stake of up to 35 per cent in Egypt’s offshore Shorouk concession, on Wednesday.

It did not disclose a value for the stake and Italy’s Eni , which controls the concession, declined to comment.

The concession includes the supergiant Zohr gas field, which was discovered by Eni in August 2015 and is the largest natural gas field ever found in the Mediterranean, with a total potential of 850 billion cubic metres of gas.

Last month, Eni agreed to sell a 10 per cent stake in the concession to BP for $375 million and the pro-quota reimbursement of past expenditures, which so far amount to around $150 million.

BP holds a 19.75 per cent stake in the Russian oil company.

“The BP deal is a proxy, valuing the whole of the field at $5.25 billion,” said Jason Kenney, oil analyst at Santander.

Bond traders expect that Rosneft could also use money from the bond issue to buy back 19.5 per cent of its own shares from state energy holding company Rosneftegaz which are slated for sale this year as part of a privatisation plan.

The bonds were being sold via open subscription. Rosneft accepted preliminary bids between 1400 and 1430 GMT on Monday, but gave no further details except to say that the interest rate would be 10.10 per cent.

Rosneft is under Western sanctions due to Moscow’s role in the Ukraine crisis and faces limits in raising funds abroad.


Under a government decree the sale of the 19.5 per cent stake in Rosneft was to be finalised by Dec. 5, with the state budget receiving the funds by end-2016. The decree did not stipulate a buyer, but Rosneft is widely expected to buy the stake itself.

Two sources told Reuters that Rosneft could discuss the privatisation deal at a board meeting on Wednesday.

A large Rosneft bond issue at the end of 2014 coincided with a steep slump in the rouble, with the deal later facing criticism from the Russian central bank governor as non-transparent.

The Russian rouble was up 0.3 per cent at 63.67 versus the U.S. dollar at 1520 GMT on Monday, supported by higher oil prices ahead of an OPEC-non-OPEC meeting later this week and little changed on the news of the Rosneft bond placement.

The government expects proceeds from the Rosneft stake sale to amount to around 711 billion roubles.

(Additional reporting by Vladimir Abramov in Moscow and Stephen Jewkes in Milan; Editing by Alexander Winning and Christian Lowe and Susan Fenton)

Ph: 432-978-5096 Website:

Ph: 432-978-5096 Website:

Posted in: News

Comments are closed.