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Russia's oil major Bashneft may be privatized after economy stabilizes — governor

August 17, 15:20 UTC+3
Bashkiria's governor says Bashneft price will rise over time
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© Sergei Bobylev / TASS

MOSCOW, August 17. /TASS/. Russian oil producer Bashneft may be privatized after stabilization of economic situation, Governor of Bashkiria Rustem Khamitov said on Wednesday on the air with Rossiya 24 TV Channel.

"It seems to me we should wait for settling in all economically unstable areas. The economy should definitely get into the normal course. Privatization option may be discussed after that if the need arises," the governor said.

According to the governor, the price will be higher over time.

"We expect Bashneft price to rise over time. We assume that it is not reasonable to sell (shares) amid the current unstable market environment," he said.

Khamitov approached the Kremlin earlier with the request to postpone privatization of the company so that Bashneft continues meeting social commitments to the region.

Russian PM sets task of making Bashneft sale more efficient

Russia’s Prime Minister Dmitry Medvedev has set the task of exploring the issue of a more efficient sale of 50.08% of Bashneft shares as the pre-sale preparation showed a serious interest of investors to the asset, First Deputy Prime Minister Igor Shuvalov said on Wednesday.

"There are bidders and we realize what price they are ready to pay for Bashneft. We are exploring the position of the leadership of Bashkortostan on the possibility of selling the asset more efficiently. Russia’s PM has made a decision to postpone Bashneft privatization and set the task of additionally studying the issue of a more efficient sale of the company’s stake," Shuvalov said.

Rosneft’s privatization moving to forefront

According to Shuvalov, the Russian Government will focus on privatization of 19.5% shares in oil major Rosneft and Bashneft will be privatized later on.

"Privatization of Rosneft is now coming to the fore. We should focus on it. Let’s return to Bashneft sale after selling the Rosneft’s stake, since we have an assignment of the President to privatize this company," Shuvalov said.

Privatization preparations unveiled significant interest of investors in the asset, the official said.

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. The Federal Property Management Agency owns 50 plus 1 share in the company’s share capital; the republic of Bashkortostan holds 25% plus one share. Bashneft’s shares are traded on the Moscow Exchange.

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