The timing of what is expected to be London's biggest public offering of the year was thrown into doubt yesterday when the Kremlin disclosed that the state-owned oil titan Rosneft may not come to market until the fourth quarter of 2006, instead of July.
The announcement is the second sign in as many weeks that the Kremlin is in two minds about how to proceed. Last month it was reported to have halved the amount it hopes to raise from a partial float from $20bn (pounds 11bn) to $10bn, apparently thanks to buoyant oil prices.
Though the Russian government has always said it wants to leave its options open, it had been widely expected to opt for a July flotation on the London Stock Exchange to coincide with a G8 summit of world leaders in St Petersburg. Mixed investor reaction to Rosneft's controversial prospectus and a growing sense that the summit may not be as harmonious as had been hoped appear to have injected uncertainty into that equation.
Yesterday Kirill Androsov, Russia's Deputy Economy Minister and a Rosneft board member, said a final decision on timing was yet to be made. "It is true that the dates are being shifted," he told reporters. "But we still believe that the IPO can take place before the end of the year. Roughly it could take place in the third or fourth quarter." In an aside, the minister disclosed that the government might decide to cancel the IPO altogether, though his aides were quick to describe that remark as a joke.
Originally the Kremlin wanted to sell up to 49 per cent of Rosneft while keeping a controlling stake, but the pitch to investors has so far been dominated by discussion of the company's controversial past.
Though in rude health, its assets include the sprawling Siberian oil unit Yuganskneftegaz, which is responsible for 11 per cent of Russia's total oil output. …