October 28, 2016 / 10:00 AM / 3 years ago

Russia's Rosneft seeks to increase stake in Bashneft

MOSCOW (Reuters) - Russian energy major Rosneft is seeking government approval to buy up to 100 percent of oil firm Bashneft after acquiring a controlling stake earlier this month as a part of a state privatization drive.

The logo of Russia's Rosneft oil company is pictured at the central processing facility of the Rosneft-owned Priobskoye oil field outside the West Siberian city of Nefteyugansk, Russia, August 4, 2016. REUTERS/Sergei Karpukhin

State-controlled Rosneft paid 330 billion rubles ($5.2 billion) for a 50.1 percent stake in Bashneft, higher than other bidders offered, including privately-owned oil company Lukoil.

The process has caused much discussion in the government about whether one state firm may buy another. The region of Bashkortostan owns about 25 percent in Bashneft, with 4 percent being treasury shares and the rest freely tradeable shares.

Anatoly Golomolzin, a deputy head of Russia’s anti-monopoly body, said the agency had received Rosneft’s request to buy up to 100 percent of Bashneft and would review it within a month.

“The company has asked the anti-monopoly body for permission to buy 100 percent of Bashneft as that automatically gives us the right to purchase any minority stake as well,” a Rosneft spokesman said.

A high-ranked source at the Russian government said on Friday it was unlikely Bashkortostan would decide to sell its stake in Bashneft.

“I think they (Bashkortostan) will not give up (its stake)”, the source said.

A spokesman for the head of Bashkortostan told Reuters the region was not in talks with Rosneft on selling its stake.

Named after the region of Bashkortostan where its oil is produced and where it operates three oil refineries, Bashneft produces around 400,000 barrels of crude oil a day - about 4 percent of Russia’s output.

Bashneft has changed hands repeatedly in the last three decades and ended up being taken over by the state in 2015..

On Thursday, Rosneft said it had asked Lukoil to cancel crude oil purchasing contracts with Bashneft. Lukoil and Bashneft also have a production joint venture in Russia’s northern Timan Pechora region.

Additional reporting by Denis Pinchuk, Olga Popova and Vladimir Soldatkin; Writing by Denis Pinchuk; Editing by Katya Golubkova and Mark Potter

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