UPDATE 2: Putin surprised at govt decision to sell Bashneft to Rosneft

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MOSCOW, Oct 12 (PRIME) -- Russian President Vladimir Putin is surprised by a government decision to allow state-run oil major Rosneft to buy a state stake in oil company Bashneft, he said on Wednesday.

“You know, it may seem weird to you, I was a bit surprised myself by such a position of the government,” he told a Russia Calling! investment conference.

“But this is really the position of the Russian Federation government, first of all of its economic and financial part.”

Prime Minister Dmitry Medvedev on Monday signed a government ruling allowing Rosneft to buy the state’s 50.075% stake in Bashneft for 329.69 billion rubles before October 14.

Rosneft offered the best price for the asset. “We know about offers from other companies, and we will support their efforts, including Lukoil and other companies. They are working efficiently. And they were worthy of buying the stake in Bashneft. But they were very unlikely to buy Bashneft and 19.5% in Rosneft at a rather high price,” Putin said.

“But we will support all our companies in other directions if not in this deal, and ensure their efficient operation at the local and international markets, increase their capitalization including though provision of licenses for expansion of operations,” Putin said.

The decision to buy Bashneft will not hurt Rosneft, but will ensure a synergy effect, as the cost of Rosneft’s shares will increase after the purchase of more than 50%. “Rosneft now has a chance not only to win back…the small premium it provides to the government during the purchase of Bashneft, but to also to sell its own stake at a profit,” he said.

Rosneft Vice President Mikhail Leontyev told PRIME separately that the company will have no problems with Bashneft integration as it has vast experience in integrating large assets. “We will carry this out in a most effective way,” he said.

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