Glencore and the Qatari sovereign wealth fund have partnered up to buy 20 per cent of Rosneft in the "largest deal in the history of Russia"

Emma Haslett
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A worker changes pipes in the former Yuk
The deal has been dubbed the "largest in the history of Russia" (Source: Getty)

Shares in British mining giant Glencore rose this morning after it confirmed it has teamed up with the Qatari sovereign wealth fund to finalise a deal dubbed the "largest in the history of Russia".

Shares were up 1.3 per cent at 304p in early trading, after Glencore said it had launched a strategic partnership with the Qatar Investment Authority (QIA) to buy a 19.5 per cent interest in Rosneft, for €10.2bn (£8.6bn), from Russia's Rosnfetegaz.

The deal was reported last week, but today Glencore said under the terms of the 50-50 agreement with QIA, it will commit €300m in equity, while QIA will commit €2.5bn. Russian lenders will provide financing and credit support.

The deal is the first international investment in Rosneft since sanctions were introduced against Russia over the annexation of Crimea in 2014. Glencore already owns a quarter of another of Russia's oil giants, Russneft.

Last month Rosneft admitted profits had fallen 70 per cent thanks to weak oil prices. However, that may just be a blip: this morning oil prices shot up after non-Opec countries said they had agreed to curb production - following a similar deal by Opec countries last week.

"We are delighted that the strong relationships that already exist between Rosneft, QIA and Glencore have enabled us to successfully enter into this transaction," said chief executive Ivan Glasenberg.

"Glencore looks forward to working with both parties to take advantage of the significant opportunities which are expected to be presented across the Russian and global oil markets."

Igor Sechin, Rosneftegaz's chief executive and chairman, added: "While being extremely complex to execute, this privatisation deal marks itself as the largest in the history of Russia. Bashneft sale, follow-on synergies and enhancing Rosneft's story with new shareholders allows the Russian state to obtain considerable revenue, which also includes the increase in the value of government's residual controlling stake.

"Despite what was a challenging market environment we successfully completed a comprehensive project identifying strategic investors that match the long-term interests of the government of Russian Federation and those of the Russian oil and gas industry."

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