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Khamitov’s press service confirms asking Kremlin to postpone Bashneft privatization

August 17, 2016, 1:27 UTC+3 UFA

Russian Prime Minister Dmitry Medvedev postponed privatization of oil producer Bashneft

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©  Sergei Bobylev / TASS

UFA, August 16 /TASS/. Rustem Khamitov, the head of the Republic of Bashkortostan, has asked the Kremlin to postpone the privatization of the Bashneft oil company, a source at Khamitov’s press service told TASS on Tuesday.

"The press service of the head of the Republic of Bashkortostan confirms the fact of appealing to (the federal authorities - TASS)," the source said.

Russian Prime Minister Dmitry Medvedev postponed privatization of oil producer Bashneft, Press Secretary of the Prime Minister Natalia Timakova told TASS earlier on Tuesday, confirming information reported earlier by RBC.

"Yes, indeed, the Prime Minister made the decision to extend the deadline for privatization of Bashneft and the President approved it," Timakova said.

According to RBC, the letter sent by the head of Bashkortostan Rustem Khamitov, who suggested postponement of privatization or contraction of the privatized government stake to 25% so that the company continued meeting social commitments to the region, served in particular as the cause for privatization deadline extension.

Economic Development Minister Alexei Ulyukayev said earlier that the Russian government intended to sell 50.08% of Bashneft shares before the end of 2016. Different options of the deal are being considered, in particular the sale of company’s shares on the exchange or their divestment to a strategic investor.

Bashneft oil company operates in more than 20 regions of Russia and abroad. It produces and processes oil in Bashkortostan, Tatarstan, the Khanty-Mansi and the Nenets Autonomous Districts.

The Federal Property Management Agency owns 50 plus 1 share in the company’s share capital; the Republic of Bashkortostan holds a 25% stake Bashneft plus one share. Bashneft trades its shares at the Moscow Exchange.

Russia’s First Vice-Premier Igor Shuvalov earlier put the preliminary cost of the government’s stake in Bashneft at $3 billion. A government agent is to submit privatization proposals to the government by autumn. Lukoil and the Antipinsky oil refinery have officially announced submitting their bids. Rosneft has also submitted its bid and the Russian Direct Investment Fund has confirmed the intention to do that according to TASS sources.

According to media reports, Tatneft, the Independent Oil and Gas Company (NNK) and the Energia fund of Russia’s former energy minister Igor Yusupov have also shown interest in the Bashneft privatization deal.

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