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Commodities trader Glencore and Qatar’s sovereign wealth fund are together buying a 19.5% stake in Rosneft, Russia’s largest oil company, the Kremlin has announced.

Russian President Vladimir Putin said: “It is the largest privatization deal, the largest sale and acquisition in the global oil and gas sector in 2016.”

The surprise move sees Glencore and Qatar paying $11.3 billion for the stake in Rosneft, where BP already owns 19.75%.

However, the state will keep the controlling stake.

The long-planned sale is part of the Russian government’s efforts to sell some state assets to help balance the budget amid a two-year recession caused by a drop in global oil prices and Western sanctions.

Image source kremlin.ru

Image source kremlin.ru

A deadline for the sale was missed, and speculation grew that Rosneft was struggling to find a buyer.

The deal also marks a turnaround for London-listed Glencore, which had seen a collapse in its share price amid a plan to sell assets and cut its huge debts.

Glencore’s shares have rebounded this year. The Qatar Investment Authority is one of the biggest investors in Glencore.

Speaking at a TV meeting with Rosneft CEO Igor Sechin, Vladimir Putin noted that the deal follows a rally in global oil prices after OPEC’s decision to cut production.

Russia, although not a member of OPEC, has agreed to cut its output in line with the cartel, and will attend a meeting with its member countries on December 10 to discuss specific details.

Igor Sechin said that Glencore and the Qatari fund will form a consortium and have equal stakes. He added that Rosneft had conducted talks with more than 30 potential bidders before striking the deal.

It had been thought that the US and EU sanctions imposed on Russia following the Ukraine conflict would deter huge investment in Russia, although companies were not explicitly prohibited from participating in the Rosneft sale.

Donald Trump’s election as US president has, however, raised speculation of a thaw in relations with Moscow.

In a statement, Glencore said that it would finance part of the deal by putting up €300 million of its own equity, with the rest financed by banks and by the Qatari sovereign fund. QIA had yet to make a statement.

Glencore stands to benefit by gaining access to Rosneft’s crude output, while Qatar will further establish itself as a major investor in some of the world’s biggest businesses.

New US sanctions have been imposed on seven Russian individuals and 17 companies it says are linked to President Vladimir Putin’s “inner circle”.

The White House said the move was a response to “Russia’s continued illegal intervention in Ukraine”.

Those targeted include Igor Sechin, head of oil giant Rosneft, and Sergei Chemezov of the hi-tech firm Rostec.

The announcement comes after the mayor of Kharkiv, a city in eastern Ukraine, was shot and critically wounded.

Hennadiy Kernes was recovering after an operation to repair damage to the chest and abdomen, but his life remained in danger, his office said.

Monday also saw pro-Russian separatists, whom Western nations accuse Moscow of supporting, seize a local government building in Kostyantynivka, a town in the eastern Donetsk region.

New US sanctions have been imposed on seven Russian individuals and 17 companies

New US sanctions have been imposed on seven Russian individuals and 17 companies

In Donetsk itself, pro-Russian activists armed with clubs and chains attacked a pro-unity rally, correspondents and eyewitnesses said. A number of people were injured in the clash.

Separatists were also continuing to detain about 40 people in the town of Sloviansk, including journalists, pro-Kiev activists and seven military observers linked to the Organization for Security and Co-operation in Europe (OSCE) as well as three members of Ukraine’s security service, officials in Kiev said.

At a special meeting of the OSCE’s permanent council in Vienna, Russian ambassador Andrei Kelin said Moscow was taking “steps” to secure the observers’ release. But the area around Sloviansk was very tense and it had been “extremely irresponsible” to send them there, he added.

The US and EU first imposed visa bans and asset freezes on a number of senior Russian officials and companies after Moscow annexed Crimea from Ukraine last month.

On Thursday, the White House said it was adding to its sanction list “in response to Russia’s continued illegal intervention in Ukraine and provocative acts that undermine Ukraine’s democracy and threaten its peace, security, stability, sovereignty, and territorial integrity”.

It accused Russia of “doing nothing to meet the commitments it made” at a meeting with Ukraine, the US and EU in Geneva on April 17, which it said had included refraining from violence or provocative acts.

Russian Deputy Foreign Minister Sergei Ryabkov said Moscow’s response would be “painful for Washington”.

He told the Interfax news agency that the Kremlin was “disgusted” by the sanctions, which he said showed the White House had “completely lost touch with reality”.

Most of the 17 companies targeted are linked to Arkady and Boris Rotenberg and Gennady Timchenko – individuals targeted in the previous sanctions list.

The latest measures also target some hi-tech exports that “could contribute to Russia’s military capabilities”.

Diplomats in Brussels also said European Union governments had reached a preliminary agreement to impose asset freezes and visa bans on another 15 people as part of expanded sanctions on Russia over its actions in Ukraine. The names are expected to be released on Tuesday, although more could still be added.

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Pavel Durov, the founder of Russia’s most popular social network site VKontakte, says he has been fired and that allies of President Vladimir Putin have taken over his site.

Pavel Durov who ran VKontakte had previously announced he was leaving the company but said he had withdrawn his resignation.

The company denied it had been withdrawn.

Pavel Durov had previously refused requests from the Russian government to censor posts on his site.

In a statement Pavel Durov said that he only found out about the loss of his job from press reports: “Today I was fired as general director of VKontakte. It’s interesting that the shareholders didn’t have the bravery to do this directly, and that I learned about my firing from the press.

Pavel Durov had previously announced he was leaving VKontakte but said he had withdrawn his resignation

Pavel Durov had previously announced he was leaving VKontakte but said he had withdrawn his resignation

“Today VKontakte goes under the complete control of Igor Sechin and Alisher Usmanov. Probably, in the Russian context, something like this was inevitable, but I’m happy we lasted seven and a half years. We did a lot. And part of what’s been done can’t be turned back.”

Igor Sechin is the chief executive of state-owned oil company Rosneft and was Vladimir Putin’s former deputy chief of staff.

Alisher Usmanov, who is the richest man in Russia according to Forbes, made his money in iron ore and steel and until recently held a stake in Facebook. He has a large shareholding in VKontakte via his internet company Mail.ru.

Pavel Durov announced his resignation publicly on April 1st but two days later said it was an April Fool’s joke.

The Russian news agency Interfax reported that Vkontakte said they had acted on Pavel Durov’s resignation letter of March 21 as he had not withdrawn it officially within an allowed one-month grace period.

In an interview with news website TechCrunch, Pavel Durov said he was no longer in Russia and had no plans to return.

“Unfortunately, the country is now incompatible with internet business at the moment.

“I’m afraid there is no going back [to the company], not after I publicly refused to co-operate with the authorities. They can’t stand me,” he said.

VKontakte has more than 100 million users and had been subject to several government requests for information.

Pavel Durov had been asked by the Russian authorities to hand over the details of Ukrainians who had used the site to create groups related to anti-government protests. He was also asked to close down a group that supported Russian opposition leader Alexei Navalny.

He refused the request and said he sold his shares in the company so that he could continue “to make the right decisions”.

“I have a clean conscience and ideals that I am willing to defend,” Pavel Durov said in a post at the time.

Reports suggest that a replacement for Pavel Durov will be elected at the next VKontakte board meeting.

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