* What is Rosneft’s background and key assets? * State owned oil giant * Founded as a result of reorganization and privatization of Russia’s oil industry after the collapse of the USSR * Reorganized instead into an open joint-stock company * Valued between $60 to $80 billion * Rapid expansion and acquisitions * Including Northern oil, exploration and development licenses to several blocks * Growth in crude oil production, rising from 98.6 million barrels in 200 to 148.3 million barrels in 2004 * Was appointed by the Russian government as Russia’s representative in the negotiation of the multitude of production-sharing agreements, which it was signing with major oil producers from all over the world * Acquired Yuganskneftegas unit from Yukos through the Baikal Finance Group * Why does Rosneft want to do an IPO? * To pay off debts * $7.5 billion debt, borrowed from the National Oil and Gas Company of India * $1 billion in Russian capital gains taxes on the IPO itself * What does Rosneft’s owner want out of an IPO? * The Russian government did not want to lose control over the company (and was not sure what share it wished to float) * Wanted the highest possible proceeds for a share * To prevent the losses it had suffered in previous privatization efforts and was highly contentious about what a fair price would be for its stake * What are the key considerations in considering to do any IPO? * Credible leadership, Enterprise vision * A reasonable deal size (at least $10 million) * Evidence of growth * Outstanding products of services that are difficult to copy * High-quality employees * Logical strategy for growth * What are the risks of investing in a share of Rosneft?