* Rosneft buys 50.1 pct of Bashneft for 330 bln rbls
* Rosneft 19.5 pct stake sale seen by end-2016
* Rosneft may buy part of 19.5 pct stake on its own
* Rosneft privatisation to bring another 700 bln rbls
(Adds further details, comments, background, wraps stories)
By Oksana Kobzeva and Darya Korsunskaya
MOSCOW, Oct 12 The Russian government's sale of
a controlling stake in mid-sized oil firm Bashneft to
the country's largest oil producer Rosneft should give
momentum to Russia's privatisation drive, President Vladimir
Putin said on Wednesday.
The Economy Ministry said that the government had completed
the sale of the Bashneft stake to Kremlin-owned Rosneft for
329.69 billion roubles ($5.30 billion).
Rosneft bought a 50.08 percent stake in Bashneft, Russia's
fastest growing oil company with production of 400,000 barrels
per day (bpd) and extensive refining assets, beating an offer
from an unidentified second bidder.
The sale is a key step in a government privatisation push
meant to raise cash to plug budget holes amid low oil prices and
Western sanctions imposed over Ukraine.
"The main thing is that we don't stop the privatisation
process on this (Bashneft sale)," Putin said at an economic
"This privatisation is carefully crafted, keeping in mind
the synergy effect for obtaining the maximal gain from the point
of view of budget and fiscal interests," he said.
Putin said that now a 19.5 percent stake in Rosneft could be
sold to private foreign investors.
The Bashneft deal has caused tensions, with the government
postponing the sale in August to calm rivalry among powerful
groups before September parliamentary elections.
Several Russian government officials including Deputy Prime
Minister Arkady Dvorkovich had said previously they opposed
plans by Rosneft Chief Executive Igor Sechin to expand further.
One state-controlled company, Rosneft, buying another,
Bashneft, could hardly be called a proper privatisation, they
"It may sound strange to you but I personally was surprised
by this government's position myself," Putin said on Wednesday,
referring to the decision to allow Rosneft to buy Bashneft.
Putin said later on Wednesday that Rosneft used its own
funds to buy the Bashneft stake, where 25 percent is owned by
internal republic of Bashkortostan. It remains unclear if
Rosneft will buy that stake later, too.
Rosneft production stands at around 4.1 million bpd now and
is expected to grow thanks to new fields coming onstream this
According to a regulatory statement, Bashneft's board plans
to vote on a new chief executive on Thursday. Alexander Korsik,
who oversaw Bashneft's production spike, is expected to be
replaced by Andrey Shishkin, a vice-president at Rosneft.
A source familiar with the situation said the management
board was also expected to be taken over by Rosneft managers.
Bashneft declined comment.
Sechin has said that the purchase of Bashneft would provide
a synergy effect for the company.
Rosneft is considering buying out part of the Rosneft stake
set for privatisation itself, as one of the options.
The state hopes to raise around 700 billion roubles from the
Rosneft privatisation to plug holes in the budget.
($1 = 62.2255 roubles)
(Additional reporting by Alexander Winning, Katya Golubkova,
Denis Pinchuk, Elena Fabrichnaya, Kira Zavyalova, Vladimir
Soldatkin; writing by Andrey Ostroukh/Katya Golubkova, Editing
by Adrian Croft)