Russia said on Wednesday it sold a stake in oil giant Rosneft for 10.5 billion euros ($11.3 billion) to Qatar and commodities trader Glencore, confounding expectations that the Kremlin's standoff with the West would scare off major investors.
The deal, to acquire a 19.5 percent stake in Rosneft from the Russian state, suggests the lure of taking a share in one of the world's biggest oil companies outweighs the risks that come with Western sanctions imposed on Russia over the conflict in Ukraine.
It pointed to a possible reassessment by foreign investors of the risks of dealing with Russia, at a time when the election of Donald Trump as U.S. president has heightened expectations of a thaw between Moscow and Washington.
The deal was announced days after Russia and OPEC agreed to coordinated output cuts to support oil prices, the first time they have cut in tandem in 15 years.
State-owned Rosneft had kept the deal a tightly-guarded secret, with the first word emerging when Russian President Vladimir Putin met Rosneft Chief Executive Igor Sechin on Wednesday evening in Moscow.
"It is the largest privatization deal, the largest sale and acquisition in the global oil and gas sector in 2016," Putin said in televised remarks from the meeting.
Under the deal, according to Sechin, Glencore and Qatar's sovereign fund will take equal shares of the 19.5 percent stake in Rosneft, which is being sold by the government as part of a privatization drive.
Rosneft has a market value of $59.17 billion, according to Reuters data, which suggests that the deal was done with a 2 percent discount to the market price.
Glencore said in a statement it would finance part of the deal by putting up 300 million euros of its own equity, with the rest financed by banks and by the Qatari sovereign fund, the Qatar Investment Authority.
The Qatari fund, which could not immediately be reached for comment, is one of the biggest investors in Glencore.
Russia will deliver a large chunk of the cash they need to fill gaps in the state budget caused by an economic slowdown and sanctions.
"Money has no smell," a government source told Reuters when asked about the outcome of the deal.