International commodity trader Glencore has revealed it has sold its stake in Russian independent Russneft to an unidentified buyer.
Glencore revealed the news of its exit from the oil producer in its latest financial results.
A Glencore spokesperson told Upstream the company is unable to comment on the identity of the buyer or comment on suggestions that its stake is set to go to one of Russneft’s creditors.
Glencore only said that the deal would be completed in the first half of this year after obtaining necessary regulatory approvals.
Glencore has assessed the fair value of its investments in Russneft at $50 million as of the end of December 2021 against $309 million a year earlier.
According to Russneft, Glencore via its holding vehicle, Rambero, has the largest minority shareholding in the oil producer, and three representatives on its 12-member board of directors.
The partnership between the companies dates back to 2002 and was developed after Russian businessman Mikhail Gutseriyev founded Russneft by amassing several minor oil producing assets in West Siberia.
Glencore has not provided a reason for its decision to exit Russneft, which came into the spotlight in summer 2021 after European Union authorities put Gutseriyev under sanctions because of his financial and political support of Belarus leader Alexander Lukashenko.
Lukashenko, who claimed his victory in presidential elections in 2020, ordered violent crackdowns on hundreds of thousands of protesters who took to the streets in peaceful demonstrations in the country’s capital Minsk and other cities.
Russneft, which reportedly saw its oil exports being refused by European buyers in 2021, was quick to announce the exit of Gutseriyev, with control reportedly passing to his brother Sait-Salam.
Sanctions against Mikhail Gutseriyev also prompted international credit agency Fitch to suspend its rating for Russneft, despite the company’s denial of his control over the company.
According to Fitch, Russneft had been heavily bankrolled by Russian state controlled VTB Bank since 2019.
According to Russneft’s latest available consolidated financial report for the first half of 2021, the producer owed more than $1.1 billion to Qatar-based CQUR Bank in which VTB has a minority interest.
Russneft earlier said that it hopes to be able to increase its production marginally by about 1% to about 137,000 barrels per day of oil.
- Russneft in public hands following 20% stake sale
- Russneft plans to sell 10% stake to help ease outstanding debt
- Cheniere reaches LNG sale agreement with Glencore
- Belarus secures cheap gas deal with Gazprom as Russia eyes more co-operation
- Europe gas prices post staggering surge as Russia cuts supplies