Streetwise Professor

January 5, 2017

Rosneft/Glencore/QIA: More Answers Mean More Questions

Filed under: Commodities,Economics,Energy,Russia — The Professor @ 8:01 am

Soon after I posted yesterday, news stories reported that the Rosneft-Glencore-QIA deal had closed. But questions still remain.

Here’s the Rosneft statement:

“As part of the previously agreed privatization deal all sides in the project, including Rosneftegaz and the consortium of foreign investors – one of the world’s largest sovereign funds, Qatar Investment Authority, and a leading Swiss commodity producer and trader Glencore – as well as financial and legal consultants, financial institutions and creditors, have finalized all corporate and technical closure and payment procedures,” the statement read.

I had to take that from Sputnik, because, curiously, there is no statement on Rosneft’s website. Yes, I know it’s the holidays in Russia, but still.

Also, look at this part: “have finalized all corporate and technical closure and payment procedures.” But on December 16, it was reported that Sechin had told Putin that the funds had been transferred to the Russian budget. Putin said so during his end-of-year gabfest. But the release says that only payment procedures have been finalized. So, whence the money that appeared in the Russian budget?

There is still the open question of the arithmetic. The moneys supposedly pledged by Glencore, QIA, and Intesa don’t add up to the purchase price. Close to 20 pct is pretty big for rounding error. So where’s that coming from?

I found this interesting:

“The technical procedures for closing (the deal) required the preparation and signing of more than 50 documents and agreements,” Rosneft said in a statement. “All this reflects the unprecedented complexity of the deal.”

Why so complex? Indeed, unprecedentedly so? What are the complexities? Many players who have not been named publicly? A complicated set of indemnities, collateralization agreements, guarantees and cross guarantees?

Another intriguing fact. Glencore announced the closing on Tuesday, 3 January. This is the sum and substance of the statement:

The Company announces that final settlement has been completed and closing achieved for the transaction described in its release of 10 December 2016.

I know Glencore is still a Swiss trading company at heart, but it is a public company now and such firms are usually somewhat more forthcoming about large transactions. Some even brag a little. Or a lot. Glencore’s statement is like a legal notice in a newspaper.

So the deal is done. Apparently, beyond that, we know little. And the principals are quite obviously very happy to keep it that way. Which is revealing in its own way.

Update. A Russian reporter kindly tells me that the Rosneft press release is available on its website. On the Russian language site, go to: “Shareholders and Investors” section > Disclosure of information > Main shareholder Rosneftegaz and open the first from the top pdf-release. It’s a PDF in Russian, moreover, meaning that you just can’t translate it in Chrome. How could I possibly have missed that?

Meanwhile, English language version of the home page of the Rosneft website tells you that “Rosneft launches Italian Cafe Chain A-Cafe in Moscow.” So we know what’s really important.



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  1. “So, whence the money that appeared in the Russian budget?” And the money must have appeared, undoubtedly. I mean, outright blatant lies is something unheard of from Putin or Sechin.

    Comment by Ivan — January 6, 2017 @ 2:58 am

  2. I’m enjoying this series of posts – it’s like a soap-opera but without being trivial!

    Comment by Hiberno Frog — January 6, 2017 @ 4:21 am

  3. Translated: PRESS RELEASE
    JSC “ROSNEFTEGAZ” informs that within the framework of the previously announced
    privatization deal all corporate and engineering have been completed
    Closing and settlement procedures between the project participants, including JSC
    “ROSNEFTEGAZ”, a consortium of international investors, who
    It includes one of the world’s largest «Qatar Investment of sovereign funds
    Authority »and a leading manufacturer and trader of raw materials« Glencore »,
    financial and legal advisors and financial and credit
    Technical closure procedures required training and
    signing more than 50 agreements and documents. It involved more than
    five jurisdictions. All this reflects the unprecedented complexity of the transaction.
    As a result of the privatization of 19.5% of “Rosneft” shares in the budget
    Russian Federation transferred 710.8 billion rubles, while taking into account the sale
    control “Bashneft” package grand total federal budget
    I received an income of more than 1 trillion 40 billion rubles. High quality
    assets of the Russian oil company, as well as the emergence of new
    professional investors in the shareholders received high
    Market assessment – the cost of the company’s shares rose after the announcement of the transaction
    20%, the cost of the control the government’s stake in PJSC “NC” Rosneft ”
    increased by an additional 350 billion rubles.
    Press-service of JSC “ROSNEFTEGAZ”

    Comment by Peter G. Warner — January 6, 2017 @ 1:25 pm

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