Cheap oil

21 May 2006

The Russian oil group s IPO will highlight how much money the Kremlin made from the seizure of Yukos s assets. Russia showed scant regard for international investors interests then. Who can be sure it won’t happen again?

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Russian state owned oil firm Rosneft has targeted July 14 for its London initial public offering, according to reports, which could raise between $8bn and $15bn.

Proceeds from the sale will go towards paying back a $7.5bn loan that Rosneft's state holding company borrowed from a consortium of banks to help finance the Kremlin to cement government control of Gazprom.

Roseneft plans to sell some of the shares directly to the public, but the bulk of the sale will take place to institutional investors abroad. The IPO is being organised by ABN Amro, Dresdner Kleinwort Wasserstein, JP Morgan and Morgan Stanley.

In Russia, banks involved include Aton, Deutsche UFG, Gazprombank, Sberbank, Ranaissance Capital and Troika Dialog.

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