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Russia's Sechin discussed offering Rosneft share to Japan: court documents

Published 09/05/2017, 11:48 AM
Updated 09/05/2017, 11:50 AM
© Reuters. FILE PHOTO: Head of Russian state oil firm Rosneft Sechin leaves after an agreement signing ceremony with Venezuela's President Maduro in Caracas
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By Polina Nikolskaya

MOSCOW (Reuters) - Igor Sechin, the head of Russian oil giant Rosneft (MM:ROSN), offered a stake in the company to Japanese investors before eventually selling to an international consortium, according to documents released during an unrelated court case.

In one of the biggest Russian privatization deals in years, the consortium made up of Qatar and commodities trader Glencore (LON:GLEN) bought a 19.5-percent stake in state-owned Rosneft, one of the world's largest oil firms, for 10.5 billion euros in December.

About three weeks before that, Sechin had attended a meeting where he described discussions with Japanese investors about them buying the stake, according to a transcript of the meeting read out in court on Tuesday.

Sechin made the remarks, according to the transcript, at a meeting with Alexei Ulyukayev, who was at the time Russia's economy minister. Sechin was wearing a wire, as part of a law enforcement sting, and Ulyukayev is now on trial for bribery, which he denies.

State prosecutors read a transcript of the recording picked up on Sechin's device at Ulyukayev's trial.

Reuters was not able to corroborate the authenticity of the transcript. A Rosneft spokesman said it was company policy not to comment on a criminal investigation.

According to the transcript, the two men talked about Japanese investors, with Sechin saying: "You know, I'm telling them, the essence of our proposals is this: 'You are getting a stake in the company, this is the first condition for development of joint projects'."

"Our second proposal, after the stake (sale), is the creation (of a venture) in production, transportation and joint work on the markets."

ISLANDS

There was no mention in the passages from the transcript read out in court of what Rosneft was proposing to create. The Japanese investors were not identified.

According to the transcript, Sechin said the Japanese side had raised the "political issue" of territories.

Moscow and Tokyo have been bogged down for years in talks over islands - called the Northern Territories in Japan and the Southern Kuriles in Russia, seized by Soviet forces at the end of World War Two.

"They are quite pragmatic. They want to fulfill their main task... To get a political benefit to the territory. Even during the talks they raised such questions, but we dismissed it at once, said: 'Guys, no!'" Sechin told Ulyukayev, according to the transcript.

Sechin also said Rosneft had offered Japanese investors a chance to take part in the development of an east Siberian oil and gas field called Verkhnechonsk, as well as the offshore Tsentralno-Tatarsky block near Japan, according to the transcript.

© Reuters. FILE PHOTO: Head of Russian state oil firm Rosneft Sechin leaves after an agreement signing ceremony with Venezuela's President Maduro in Caracas

Japanese media outlet Nikkei reported last year that the Japanese government was considering investing as much as 1 trillion yen ($9.7 billion) to buy 10 percent of Rosneft through the government-backed Japan Oil, Gas and Metals National Corp, or JOGMEC. Trade Minister Hiroshige Seko later said the government was not considering an investment in Rosneft.

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