Bashneft should not remain state-owned, says Ulyukaev

By bne IntelliNews November 26, 2014

bne IntelliNews -


Russia's economy minister Aleksei Ulyukaev has called for regional oil company Bashneft to be privatised once it is transferred from conglomerate Sistema, following a controversial court decision that it was illegally acquired in 2008. 

In an interview with Germany's Frankfurter Allgemeine Zeitung, Ulyukaev said that Bashneft should now be reprivatised to a private company "by the usual mechanisms", rather than sold to a state company. "Bashneft should be privatised by the generally accepted mechanisms [by the state property fund] and not by sale to a state-owned energy company," he said. 

"Bashneft should not stay in state ownership and we will include this company in our privatisation plan," said Ulyukaev. "But this also depends of course on the situation on the market," he added.  "Russia's oil sector is very competitive and so there is no reason for the state to keep a stake in it," he said.  

The court decision to re-nationalise Bashneft said that the company had been illegaly privatised to politically connected figures in 2001, and that Sistema had thus illegally acquired it later, knowing that it was stolen property. Many observers regarded the court decision as a politically motivated move to return the company to state ownership, at a time when the state oil sector has been hit by Western sanctions and a falling oil price. Russia's largest oil company Rosneft, run by Russia's so-called 'energy tsar' Igor Sechin, is seen as the most likely candidate to acquire Bashneft.

Ulyukaev is regarded as belonging to the liberal pro-privatisation wing of the government, as opposed to a statist group headed by Sechin and head of Russian railways Vladimir Yakunin, both longstanding associates of President Vladimir Putin who have been placed under personal sanctions by the EU and US.

According to Ulyukaev, the government is also ready for the sale of a 19.5% stake in Rosneft, which would reduce the state's stake to 50%. "Technically we could sell the stake today, but you see what is happening on the market. Today we could not achieve a fair price," he said.

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