Kremlin: Some oil privatization by year's end

MOSCOW, July 11 (UPI) -- Privatization of Russian oil production and maritime shipping companies could be completed before the end of the year, a deputy minister said Monday.

The Kremlin has been reviewing privatization options as the Russian economy risks lingering in recession because of the strains brought on by Western sanctions and low crude oil prices. Privatizing state oil company Rosneft could bring in up to $6.5 billion to a federal budget struggling under the strains of lower crude oil prices.

Russian First Deputy Prime Minister Igor Shuvalov said similar potential exists for oil company Bashneft and maritime shipping company Sovcomflot.

"We hope that all or a part of the companies will be sold by the end of the year," he told reporters.

Bashneft in March said its net income was off more than 65 percent compared with the fourth quarter of 2015. Year-on-year, the company said income increased 35 percent, which Bashneft President Alexander Korsik attributed to a commitment to a long-term strategy that was supportive of shareholder value.

China National Petroleum Corp. may be among the potential buyers for the Russian government's stake in Rosneft, though little information has surfaced about Bashneft since details of a potential divestment surfaced in April.

Revenue for Russia will help the country overcome economic stress from the weakness in crude oil prices. A July survey from the Central Bank of Russia estimated second quarter gross domestic product could decline between 0.2 percent and 0.5 percent. That came as wages rise with inflation, while the pace of industrial output grew by 0.7 percent year-on-year.