Russia has published a government decree ordering the sale of a 19.5 percent stake in state-controlled oil giant Rosneft in time for the proceeds to be received by the end of the year.
The decree, signed by First Deputy Prime Minister Igor Shuvalov, ordered the sale of stake by state energy firm Rosneftegaz to be finalized by Dec. 5, Reuters reports, citing the document.
Russia’s budget, which is in danger of running up a bigger deficit this year than the 3.7 percent of gross domestic product envisaged, needs about 1 trillion rubles (US$15.7 billion) from privatization deals in 2016.
So far, the state has raised 382 billion rubles from sales of shares in diamond producer Alrosa and oil company Bashneft.
The rest is expected to come from the stake in Rosneft, which bought a 50.1 percent stake in Bashneft in October.
Economy Minister Alexey Ulyukayev said in a statement that the proceeds from the Rosneft sale were expected to be a minimum of 748.3 billion rubles, and that amount would then be adjusted by a coefficient of 0.95.
That would translate into a minimum of 711 billion rubles in budget proceeds, according to Reuters calculations.
Under the current plan, Rosneft is due to buy the 19.5 percent stake itself so the proceeds can fund the budget before the end of the year.
Rosneft would then resell the shares to investors some time in the first quarter of 2017.
At the moment, Rosneftegaz holds a 69.5 percent stake in Rosneft.
Igor Sechin, Rosneft’s chief executive, is also expected to be re-elected as chairman of the Rosneftegaz board, according an Interfax source.
Russian officials have said Rosneft has the funds to buy the 19.5 percent stake from Rosneftegaz.
Rosneft agreed on Monday to sell a 20 percent stake in its Verkhnechonskneftegaz production unit for US$1.1 billion to China’s Beijing Gas.
The deal is subject to regulatory approvals.
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