Qatar Taps Rothschild As Adviser In Bid For Rosneft Units In Germany

Wedoany.com Report-Nov 11,  Qatar’s sovereign wealth fund is bolstering its efforts to take over the German businesses of Russian oil giant Rosneft PJSC as the government in Berlin looks to relinquish control of the entities. 

The Qatar Investment Authority has appointed Rothschild & Co. as its advisory bank to acquire Rosneft Deutschland GmbH and RN Refining & Marketing GmbH, according to people familiar with the matter. 

The units are valued at €3 billion to €5 billion ($3.2 billion to $5.4 billion), they said, declining to be identified as the discussions are private. 

Germany is seeking to put an end to a two-year legal and regulatory battle over control of the Rosneft assets, after seizing them in the wake of the Kremlin’s invasion of Ukraine in 2022. Since then, the units have been held in a temporary trusteeship, which has been extended several times. 

The latest discussions were under way before German Chancellor Olaf Scholz on Wednesday called for snap elections after dismissing the nation’s finance minister. The government has indicated that the political developments will have no bearing on the sale of Rosneft’s German units. 

“We are not steering the sales process, which is being handled by Rosneft, and that remains unaffected by any German election decisions,” a spokesperson from the German economy ministry said.

The Qatari wealth fund didn’t respond to a request for comment. Rothschild declined to comment.

QIA is the only remaining bidder for the Rosneft companies, and the German government would agree to the sale, Bloomberg previously reported. No potential Western buyers have emerged due to sanctions against Russia.

Representatives from Qatar have been in Berlin recently to move forward with the transaction, according to the people familiar with the talks. Germany wants the deal concluded by the end of the year and has given the wealth fund access to Rosneft Deutschland’s finances, they said.  

Rosneft Deutschland is “doing everything we can to facilitate a successful completion of the transaction,” a spokesperson for the company said by phone. Parent company Rosneft didn’t immediately respond to a request for comment.

Qatar would seek approval from the White House before concluding an agreement, in order to maintain good relations with the US, the people said. It’s not clear whether the sale would be affected by Donald Trump’s return to the presidency, as the discussions were in progress before the US elections on Nov. 5.

Qatar controlled an 18.46 percent stake in Rosneft as of 2021, the latest data available, according to company filings. It maintains close diplomatic ties with Moscow. 

The Gulf state has also backed a number of major German companies in recent years, including Volkswagen AG, Siemens AG and RWE AG. Ownership of the Rosneft units would allow it to gain a foothold in the European oil sector, as the assets include minority stakes in three German refineries and the Transalpine crude pipeline.

A potential complication for the deal involves PCK Raffinerie GmbH’s Schwedt plant near Berlin, in which Rosneft Deutschland has a majority stake. The refinery has been cut off from Russian supplies since last year and has run below full capacity as it sources crude from other markets, including Kazakhstan.

There have been ongoing discussions about the value of the assets, including the refineries, according to the people. Russian newspaper Vedomosti in 2022 reported that Rosneft’s assets in Germany were worth more than $7 billion, citing an unidentified consultant.