Russia delays Bashneft sale

MOSCOW, August 17, 2016 – Russia has temporarily shelved plans to sell its holding in Bashneft, with the prime minister’s office on Tuesday citing the persistent slump in oil prices as reasons for the decision.

“The prime minister made the decision, which was approved by the president, to move the Bashneft privatisation to a later date,” Bloomberg quoted premier Dmitry Medvedev’s spokeswoman Natalya Timakova as saying. Local media said the asset sale would not take place in 2016.

The government’s stake, reportedly valued at USD 5 billion, had in recent months caught the attention of Lukoil, Rosneft and Russneft. However, in early August reports surfaced that President Vladimir Putin would seek to ban Rosneft from bidding, as this would drive up the value of the government’s stake in Rosneft and could thus affect the government’s plans to sell its 19.5% holding in the company.

The Ministry of Economic Development of the Russian Federation last week pointed out it had no legal means to stop companies such as Rosneft from bidding, and that barring it from participating would require a special government decree.

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