Glencore and Qatar's sovereign wealth fund snap up a 19.5 per cent stake in Russian state-controlled oil group Rosneft

Francesca Washtell
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The Kremlin wall is reflected in a plaqu
Russia is still the majority owner of Rosneft (Source: Getty)

Glencore and Qatar's sovereign wealth fund have banded together to buy a 19.5 per cent stake in Russian state-controlled oil producer Rosneft.

The FTSE 100-listed commodities group and the Qatar Investment Authority (QIA) will pay Russia €10.5bn (£8.9bn) for a fifth of the world's largest listed oil producer, Russian state media has said.

Russia will prepare a scheme for foreign currency conversion into roubles to avoid financial market volatility, a Kremlin spokesman told reporters.

Read more: Rosneft boss says he will not comply with output freeze as oil prices dip

Last month, Rosneft revealed its net profit had plummeted 71 per cent in the third quarter to 26bn roubles (£320m) as weak oil prices continued to bite.

The deal between the Glencore-Qatari consortium and the Kremlin is the first international investment in Rosneft since international sanctions were introduced against Russia in 2014 over the annexation of Crimea.

Glencore already owns around a quarter of another Russian oil producer, Russneft.

Read more: S&P: Crude prices not biggest threat to Russian oil majors

The privatisation of another stake in Rosneft comes after Russia pledged last week to cut its crude production by up to 300,000 barrels per day by mid-2017.

Although it is not a member of oil cartel the Organisation of the Petroleum Exporting Countries (Opec), Russia negotiated with the group at length before Opec firmed up an agreement on 30 November to cap oil production, in a bid to tackle the global supply glut.

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