Midnight sale of Russian oil giant causes suspicions

Late in the night of Dec.8, CEO of the Russian oil giant Rosnneft Igor Sechin reported to President Vladimir Putin that privatization of the company has finally been finalized. The consortium comprising Swiss company  Glencore and Qatar sovereign fund has bought 19.5% of the Rosneft. The Russiangate investigates who the new co-owners of the Rosneft are.

The Glencore said that it had acquired indirectly only 0.54% of the Rosneft shares. 

“Other than the economic exposure represented by the Glencore Equity (amounting to a c. 0.54% indirect equity interest in Rosneft), Glencore would not have any economic exposure to its interests in the Shares”, the company said in its news release.

Earlier, Sechin said that the Glencore and Qatar would obtain equal amounts of shares of the Rosneft. The Swiss company has not responded to the Russiangate's request by the time of the publication.

What is Glencore?

The Glencore is one of the world's largest supplier of raw materials and precious metals. It was established in 1974 by the US citizen Marc Rich.

The company form the start conducted high-risk operations, which had often contradicted the US official policy: it bought precious metals in Cuba, traded with Libya, South Africa and the USSR. The Soviet Union (and later Russia) has been in the focus of the Glencore. In 1993, the Glencore became one of the principal buyers of Russian natural resources.

When in 2000 Vladimir Putin replaced Boris Yeltsin as Russian President, the Glencore had consolidated its presence in Russia, buying shares in the large bauxite companies. The company did not neglect oil, precious metals and other raw materials either.

The Glencore launched its “aluminum offensive” in Russia in 1993 exporting 750,000 tons of that metal.

In 2007, three Russia's largest bauxite-extraction companies (RusAl, Sual and Glencore International) signed a merge deal, thus creating one of the world's largest consortiums in  aluminum production industry.  The Glencore's share in the consortium was equal to 14%.

The other Glencore's business is grain trade.

By 2015, the Russian grain market was dominated by two major players: the Rif and the International Grain Company (affiliated with the Glencore). In April 2016, the Swiss company, having being in a difficult financial situation, sold 40% of its shares to one of the Canadian pension funds.

Meanwhile, Russian oil and gas sector had remained the Glencore's main interest in the country.

In 2003, it invested $300 mln into the Rusneft and purchasing new oil deposits via that Mikhail Gutseriev's company, but the deal had been aborted by the Prosecutor's office in 2007. The prosecutors opened a criminal case against Gutseriev and the Rusneft over tax evasion. The other reason behind the prosecutors intervention allegedly had been Gutseriev's active attempts to imped the Rosneft expansion in Ingush republic in Northern Caucasus.

Eventually, the problems had been solved and the Glencore remained one of the Rusneft's main shareholders.

In August 2016, the other companies crediting the Rusneft and owned by Gutseriev converted their debt into shares belonging to the Glencore. As a result, the Swiss company' share had fallen from 46% to 25%. It may well happen that the recent active movements of the Glencore have been due to that loss.

Glencore's Russian trace

The Glencore's representative in Russia has been the Anteks+ Ltd (est. 1998), founded by the Renaisco B.V. According to the Bloomberg, it is the Glencore's agricultural sister company.

The Renaisco worked at the Russian and Ukrainian agricultural markets until 2016.

The Anteks+ has been a founder of a handful of other companies, such as Devis Ltd and Kurant Ltd. The Anteks+ has been affiliated with the Nitek and Prominvest companies established by Cypriot offshores the Yulian Investments Ltd and Cliff Hill Holdings Ltd. 

Qatar trace

The Qatar sovereign wealth investment fund (also known as Qatar Investment Authority, QIA) was established in 2005 with the aim to diversify the country's oil-dependent economy. The fund has been investing in a range of international assets.

In 2013, the QIA invested $30 bln into the British economy, $10 bln into France and$5 bln into Germany.  The QIA owns shares in the German's Vilkswagen auto-maker and in the Hochtief construction company.

Besides, Qatar possesses shares in the oil companies, such as the Royal Dutch Shell (9%) and Total (4,8%).

Some western sources looks at the QIA with a grain of suspicion, citing its alleged participation in financing of the terrorist Islamic State.

Things happen

The saga around the Rosneft privatization started in September 2016, when Russian PM Dmitry Medvedev had announced that 50.08% of the Bashneft shares and 19.5% of the Rosneft shares would be privatized by the end of the year.

The Bashneft's shares had been sold to the Rosneft, which caused arguments over whether  purchase of the shares of one state-run company by another state-run company could be defined as privatization.

The Rosneft had initially supposed that its shares would be bought back by the company itself.

“We love our shares”, its representative Mikhail Leontyev told the media. 

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