ONEKSIMBANK PULLS OUT OF ROSNEFT AUCTION.

The Russian government’s hopes of earning badly needed cash by selling Rosneft, the largest oil company still in state hands, received a serious setback yesterday when Russia’s largest private bank, Oneksim, announced that it will not be bidding in the sale. (ORT, July 6) Oneksim’s decision follows last week’s announcement by Royal Dutch Shell that it too will not be tendering for control of the company. Both companies blamed the fall in world oil prices. Oneksimbank had formed a consortium with British Petroleum and was expected to bid against a rival consortium formed by Shell with LUKoil and Gazprom.

Observers say the sale of Rosneft is critical to shoring up the government’s finances and to restoring investor confidence. The failure of the government’s first attempt to sell Rosneft in May, when the company attracted no bidders at the initial asking price of US$2.1 billion, is seen as one of the factors that contributed to Russia’s latest financial crisis. On June 2, the government announced new terms of sale, dropping its starting price to US$1.6 billion and inviting bids by July 16. The result of the auction was due to be announced on July 21.

SIBERIAN MINERS CONTINUE RAIL BLOCKADE.