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Report: Qatar boosts stake in Rosneft as oil giant prioritizes shareholder value


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Report: Qatar boosts stake in Rosneft as oil giant prioritizes shareholder value

Qatar reportedly increased its interest in PJSC Rosneft Oil Co. after the Russian oil major said it would look to increase value for its investors, three people familiar with the matter told Reuters.

At the beginning of May, the Russian state-owned company announced a US$2 billion share buyback program that will run through 2020 as well as plans to reduce its hefty debt in an effort to increase profitability and returns

"The company continues to demonstrate robust financial results and proposed new initiatives will enable us to improve the focus on the business using core strengths that will result in the enhancement of shareholder returns," Rosneft CEO Igor Sechin said in a May 1 news release.

Rosneft's announcement was followed by news that the Qatar Investment Authority sovereign wealth fund increased its stake in the Russian oil company to almost 19%.

In March, Sechin made a trip to Qatar, during which time the deal was reportedly hammered out, according to Reuters.

A previous deal by a Glencore PLC and Qatar Investment Authority consortium to sell a 14.16% stake in Rosneft to CEFC China Energy Co. Ltd. was scrapped. The consortium was dissolved, and the sovereign wealth fund took direct control of the 18.93% interest while Glencore took the remaining 0.57%.

Rosneft is Russia's largest oil company. For full year 2017, Rosneft's net income attributable to shareholders rose to 222 billion Russian rubles, or 20.95 rubles per share, up from 174 billion rubles, or 16.42 rubles per share, for full year 2016.

Rosneft posted a 20.6% year-over-year increase in total revenues to 6.014 trillion rubles from 4.988 trillion rubles recorded in 2016. For 2017, the company's operating income came in at 624 billion rubles, down from 655 billion rubles.

As of May 10, US$1 was equivalent to 61.84 Russian rubles.