The state-owned Russian oil and gas group Rosneft has confirmed it is to launch its initial public offering of shares in London and Moscow. It has not yet revealed what percentage of the company will be sold.
The flotation could raise as much as eight billion euros, but several larger investment firms have said they are not planning to participate because they have concerns about potential legal risks. Pumping 1.58 million barrels a day, Rosneft is Russia’s third largest oil producer – behind Lukoil and TNK-BP – but it is the country’s fastest growing oil firm with production increasing by nearly 10% a year. Much of that growth is from the former Siberian assets of YUKOS, which Rosneft now owns.
Russian investors will be able to buy Rosneft shares from the 29th of June. The company reportedly will use much of the money raised to pay back a six billion euros loan taken out last year in order to buy additional shares of the Russian gas monopoly Gazprom and so increase state control over it.