Page 8 - FSUOGM Week 08 2022

FSUOGM INVESTMENT FSUOGM

Glencore cuts deal to

exit Russneft

RUSSIA GLOBAL commodities giant Glencore recently per day (bpd) mostly in Siberia, and has faced
announced plans to sell its stake in mid-sized difficulties since Gutseriev was sanctioned
The move draws a Russian oil producer Russneft, drawing a line by the EU last year for his close links with
line under a 20-year under its 20-year partnership with the company. Belarusian President Alexander Lukashenko.
partnership. The sale has been under consideration since Gutseriev plays a role in supplying Russian oil
Glencore reshuffled its management in Decem- to Belarus, and also owns the Slavkali com-
ber 2021 and is expected to be closed in the first pany that is building the Nezhinsky potas-
half of 2022, pending regulatory approvals, sium chloride mining and processing plant in
Glencore said. Explaining its decision, the com- Belarus. He is also a long-standing personal
pany described Russneft as no longer material friend of Lukashenko.
to its business. The sanctions have made it harder for Russ-
Glencore did not disclose the value of the neft to export its crude, with Glencore having
transaction, and nor did it specify the identity of forgone purchases for several months.
the buyer. But Russia’s Kommersant newspaper “Glencore’s exit from Russneft is a sign of a
reported that the buyer was Russneft’s founder worsening investment climate, but it doesn’t nec-
and former majority owner Mikhail Gutseriev, essarily set a precedent for other foreign inves-
valuing Glencore’s stake at almost RUB11bn tors to sell their stakes in Russian companies,”
($146mn). Today Gutseriev’s SAMAR group Dmitry Marinchenko, senior director at Fitch
owns a 11% stake in the producer. Ratings, told Reuters.
The sale has been announced against the Glencore’s departure also comes at a time
backdrop of some of the worst tensions between when oil is trading at a multi-year high, following
Russia and the West. Asked about these tensions a sharp rebound in demand since coronavirus
over Ukraine, Glencore CEO Gary Nagle said (COVID-19) restrictions were eased, prompting
the group was not concerned about its Russian a recovery in fuel demand. The trader has been
investments, as they are “immaterial.” But he shifting its focus away from Russia under Nagle
added that “if there is some sort of activity in the and its new head of oil, Alex Sanna. They took
Ukraine and Russia, it will cause severe disrup- the company’s reins last year after decades of
tions in various commodity markets.” leadership by Ivan Glasenberg and Alex Beard,
Russneft produces some 130,000 barrels who had closer ties with Moscow. ™

P8 www. NEWSBASE .com Week 08 23•February•2022