The Russian government is to postpone the privatization of one of the country's largest oil companies, Bashneft, from September-October 2016 to a later date, according to an announcement made by Russian First Deputy Prime Minister Igor Shuvalov.
The government is also yet to receive any applications for the purchase of the 19.5-percent share of Rosneft, Russia's largest oil company, either from Russian or foreign players, reports the RBK business daily, citing sources within the Cabinet of Ministers. According to the publication, it is unlikely this deal will take place in 2016.
"The strategic reason for the postponement of the privatization is the weak situation on the oil market and the foggy possibilities of attracting private investors," said Sergei Khestanov, advisor on macroeconomics to the general director of Moscow-based brokerage firm Otkrytie Broker.
The price is wrong
Igor Shuvalov explained that there are real buyers for the Bashneft package, including Russia's largest private oil company Lukoil, Rosneft and the Independent Petroleum Company (IPC), which belongs to Rosneft's former president Eduard Khudainatov.
While Ernst & Young has estimated the state package in the oil company to be worth 306 billion rubles ($4.8 billion), Rustem Khamitov, governor of the Bashkortostan Republic, where Bashneft operates, believes the estimate falls short and that the state package can be sold for more money. He has already sent a petition to Russian President Vladimir Putin.
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