Russia Selling Off Its Crown Jewel? -- January 30, 2017

The price of a Big Mac Combo Meal in New York City: $8.

The price of a Big Mac Combo Meal in Paris: €8.

Current conversion: $1 = €0.93.

About 1:1.

Data points, Russia-Rosneft-Italy-Qatar-Swiss Glencore mega-deal:

• mega-oil deal: late, 2016, Russia sold almost 20% of its stake in its giant oil company -- Rosneft
• stake sold for slightly more than €10 billion; valuing Russia's stake in the company (before the sale) at €52 billion
• Putin: called it the largest sale and acquisition in the global oil and gas sector
• also one of the biggest transfers of state property into private hands since the early post-Soviet years
• buyer: Qatar and Glencore
• Glencore: Swiss oil trading firm
• Glencore: only €300 million, less than 3% of the purchase price; Glencore said it limited its interest to just half-a-percent of Rosneft; likely to be a Cayman Islands company whose owners cannot be traced
• public data and "inference" suggests:
• Qatar: €2.5 billion
• Glencare: €0.3 billion
• Intesa (Italian bank) loan: €5.2 billion
• shortfall: €2.2 billion 
• the full €10.2 billion traces back to Russia's second-largest bank, state-controlled VTB

If I read that correctly, the government of Russia backed/guaranteed the deal until Intesa's loan arrived (but again, I may be misreading this)

Why is this important?

• Rosneft: world's largest listed oil company by output; one of two crown jewels of the Russian state;
• Gazprom: Russia's other crown jewel
• Qatar (from the article):

• they like investing in energy
• they saw the upside in Rosneft
• they saw the upside in building relations with Russia
• Russia's role in Middle East politics is only set to rise

As I skim through the milliondollarway articles on Qatar, two things jump out at me:

• Qatar is having its own financial challenges; will run a $13 billion deficit this year;
• due the vacuum created in the Mideast by the Obama administration, Russia has moved into fill it