Russia’s finance ministry seems to have won a major victory in its battle with state-owned oil major Rosneft, which conceded on September 29 it will pay out half of its profits as dividends this year.

Despite being one of the biggest and most lucrative business in the country Rosneft’s state-owned holding company that collects Rosneft’s dividends, didn't pay out anything to the state last year.

Rosneft’s CEO Igor Sechin is close to president Vladimir Putin who he managed to convince that the company needed special treatment to fund many large projects. The Ministry of Finance has introduced a rule that all state-owned enterprises (SOE) have to pay half their profits as dividends, but has only managed to collect about half of what was due. In July, the finance ministry complained that it will receive only RUB208bn (€3bn) in dividends from state-owned enterprises or only 40% of RUB483bn planned for 2017.

This year Rosneft says it will increase dividends from 35% of net profit to 50% of IFRS net profit, Vedomosti reported on September 29.

Thanks to the increase, Rosneft's shareholders will collect RUB40.6bn ($698mn) for January-June 2017.

Rosneft's new shareholders, Qatar’s sovereign fund and oil trader Glencore, are to collect RUB7.9bn, and BP RUB8bn.

Rosneft changed its dividend policy in response to a direct suggestion from President Vladimir Putin back in June.

In December 2016, Rosneft sold 19.5% of its shares to Qatar’s sovereign fund and Glencore for €10.5bn.

In early September, the news came that Rosneft will sell a 14.16% stake to China Energy Company (CEFC) for $9.1bn, but the deal has not yet been finalised.

Recently, Russia’s Finance Ministry has been fighting with Rosneftegas over its missing 2016 dividends.

Rosneft 1Q17 IFRSfinancial highlights
USD mn	1Q16	4Q16	1Q17	2Q17	Chng, QoQ	Chng, YoY
Revenues	14,034	23,546	23,965	24,482	2%	31%
EBITDA	3,187	5,169	4,810	4,550	-5%	-6%
Net income	187	824	221	1,190	439%	-12%
Source: Company data, VTB Capital Research; * Provided by Interfax as of 4 May 2017