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Russia says Rosneft stake sale to come before Bashneft

Russian oil

First Deputy Prime Minister Igor Shuvalov said “When the stake in Rosneft is sold, we will return to selling a stake in Bashneft”. Reuters photo by Maxim Shemetov.

Moscow looking to sell a 19.5 per cent stake in Rosneft

MOSCOW, Aug 17 (Reuters) – A sale of part of Russia’s holding in oil producer Rosneft is a priority and will come before any privatisation of mid-sized rival Bashneft, First Deputy Prime Minister Igor Shuvalov said on Wednesday.

“We should focus on (Rosneft)”, Shuvalov said. “When the stake in Rosneft is sold, we (the government) will return to selling a stake in Bashneft as we have the President’s order to privatise it.”

Russian Prime Minister Dmitry Medvedev on Tuesday unexpectedly postponed indefinitely the plans to privatise Bashneft, which had created tensions over whether state-run Rosneft should be allowed to buy a stake in its rival.

Bashneft’s privatisation aimed to help to plug gaps in Russia’s budget caused by lower oil prices and Western sanctions over the country’s actions in Ukraine.

The sale was earlier planned for the autumn, with the government valuing a 50.08 percent stake in Bashneft at around 306 billion roubles ($4.78 billion).

Russia holds a controlling stake in Bashneft while a 25 percent is owned by the republic of Bashkortostan whose head, Rustem Khamitov, reiterated on Wednesday that the republic was not considering sale of its stake.

In a televised interview with Rossiya 24 TV channel Khamitov also said that the privatisation of Russia’s government stake might take place when the economic situation improved.

“The economy should return to a normal path,” he said.” After that, if there is a need we can discuss the ways of privatisation”.

Russia included a sale of a stake in Rosneft, the world’s biggest listed oil producer by volume, in its privatisation plan for 2016. The government plans to sell a 19.5 percent stake.

Citing the economy minister, RIA news agency reported state-controlled Rosneftegas, which owns 69.5 percent of Russia’s Rosneft, should present by Sept. 1 names of potential candidates to participate in Rosneft’s privatisation.

The agency also reported that the economy ministry said that Rosneftegas should also propose its recommendations on the terms, price and the size of the planned stake sale.

(reporting by Darya Korsunskaya, writing by Denis Pinchuk; Editing by Lidia Kelly and Jane Merriman)

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