Russian President (then Prime Minister) Vladimir Putin, left, gives a certificate to Russian gas monopoly Gazprom Head Alexei Miller at a ceremony in St. Petersburg, Russia, Tuesday, April 10, 2012.Yana Lapikova/The Associated Press
Russian President Vladimir Putin on Thursday ordered the government to approve a plan to sell assets held by state energy holding company Rosneftegaz in 2013-2015, paving the way for the sale of stakes in Gazprom and Rosneft.
The decree appeared to represent a renewed drive to privatize Russian energy assets, but the president later muddied the waters by stating that Rosneftegaz itself could take part in auctions of state-controlled energy and power companies to prevent them being sold to the private sector on the cheap.
"(These companies) are undervalued and we would not like them to be privatized for peanuts and then to be resold right away for serious money," Mr. Putin said.
He said that using Rosneftegaz as a vehicle for acquiring state companies was a way to recapitalize them using non-budgetary resources, adding that "nothing has changed with regard to privatization plans".
The decree stated that Rosneftegaz would have to finance any acquisitions using dividends paid by companies that it owned.
Mr. Putin's comments were the latest in a series that have left the market scratching its head over the new government's stance on privatization since its formation earlier this week.
Russia first announced a plan to raise hundreds of billions of dollars via a wide ranging privatization plan two years ago, but little progress has been made amid volatile stock-market conditions.
Mr. Putin's latest order potentially opens the way for the sale of a stake in biggest oil producer Rosneft, although on Tuesday a separate Presidential decree placed the giant on a list of strategic companies that should officially remain in state hands.
Rosneftegaz controls 75.16 per cent in Rosneft, 10.74 per cent in Gazprom and 7 per cent in the Caspian Pipeline Consortium.
While Gazprom's privatization has not been discussed, selling down the state's stake in $65-billion-valued Rosneft has been included on earlier lists of assets to be auctioned.
Shares in Rosneft increased 1 per cent by 12:51 p.m. GMT, underperforming a 1.4 per cent rise in the broader market.
Russia had planned to sell 15 per cent in Rosneft in 2012 as part of a wider privatization program, but the plan was later scrapped due to a low share price.
Igor Sechin, the energy 'czar' in Mr. Putin's former government and now Rosneft's chief executive officer, has long opposed the sale of the stake in Russia's top crude producer, which raised $10-billion in one of the biggest London IPOs of all time in 2006.
Mr. Sechin was also nominated to chair Rosneftegaz.
"Rosneftegaz has been formally a judicial structure so far. Now it looks like there are intentions to convert it into a mega corporation, into some kind of energy holding," said Denis Dyomin, an analyst with BFA agency.
Rosneft, which accounts for more than a quarter of Russia's total crude oil production, earlier this year struck landmark agreements with ExxonMobil , Eni SPA and Statoil ASA to tap huge hydrocarbon reserves in the Russian Arctic and other regions.