Glencore to exit Russneft oil company by 2024

Commodity trading major Glencore could complete its exit from Russian oil company Russneft by the end of 2024 (Glencore owns 31.28 % of Russneft ordinary shares through the Rambero Holding AG structure), Renaissance Capital wrote on September 30 citing the statements of RussNeft CEO Evgeny Tolochek on the sidelines of the Russian Energy Week.

As followed in detail by bne IntelliNews, Glencore was de facto the sole buyer of crude produced by Russneft. The trader has actively participated in the establishment of the company since the early 2000s by lending funds to its founder Mikhail Gutseriev of Safmar Holding.

The market value of Glencore’s stake in Russneft as of the closing price on September 27 is about RUB15bn, RenCap analysts estimate. The potential buyer of the Glencore stake has not been disclosed.

In addition, Tolochek said that Russneft may reduce production in 2024 by about 5% year on year to 6.09mn tonnes (versus RenCap forecast was 6.2mn tonnes) mainly due to the inertia of investment cuts back in 1H23.

“We believe that the news [of Glencore exit and output cuts] has a neutral effect on the company's shares,” the analysts commented, noting that more significant catalysts for Russneft's investment case will be debt repayment / buyback and redemption of preferred shares on which the company pays dividends. 

Russneft disclosed a 60% y/y revenue increase under IFRS to RUB147bn in 1H24, with EBITDA jumping 5-fold y/y and net income up 13 fold y/y to RUB38.5bn.