Qatar Investment Authority (QIA) owns roughly 19% of Rosneft, an integrated Russian energy company headquartered in Moscow.
According to Bloomberg, QIA and the UAE are adopting a different approach from the Norwegian sovereign wealth fund, by choosing to hold on to Russian assets worth billions of dollars, as opposed to removing the assets from their portfolio.
The sources added that the QIA sees this investment as a key to support relations between Doha and Moscow.
Qatar is one of the largest foreign investors in Russia, with diversified investments amounting to more than $13bn.
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Mubadala, the investment arm of the emirate of Abu Dhabi, has at least $3 billion in investments with Russia, and is also unlikely to break up its partnership with the Russian Direct Investment Fund, or take steps that impede the relationship.
Investments from the Middle East in Russian and CIS assets have increased over the past few years, according to data from research firm Global SWF.
The research firm also states that Saudi Arabia’s Public Investment Fund, the QIA, and Mubadala are among sovereign funds with the biggest investments in Russia.
Following Russia’s military invasion of Ukraine, European and North American firms have been distancing themselves from the country, due to geopolitical risk.
BP, British multinational oil and gas giant, said on Sunday that it will exit its 19.75% stake in Russian oil giant Rosneft after Russia’s invasion of Ukraine, amid growing pressure from the British government.
The company’s decision to abandon its Rosneft holding will result in a $25bn charge, BP said in a statement. Bloomberg’s sources stated that unlike BP, the Qatari fund is not under pressure to sell its shares.
The Wall Street Journal reported last week that British officials were accusing Rosneft of fuelling Russia’s advance into Ukraine.
QIA’s history with Rosneft
Qatar’s sovereign wealth fund became a shareholder in Rosneft following the Russian oil giant’s privatisation in late 2016. QIA emerged as a major shareholder in the company in May 2018 after a $9 billion deal to sell a stake to China’s troubled CEFC Energy Co. collapsed.
At the time, Doha was facing an illegal boycott by neighbouring Gulf countries and was looking to expand its international partnerships.
The sovereign wealth fund owns 18.93% of Rosneft. This makes it the second-largest shareholder in the company after the Russian state, which holds 50%.
Reuters reported in 2018 that the Russian state bank VTB secretly loaned an approximate amount of $6bn to QIA. The loan’s goal was to help finance its acquisition of the Rosneft stake. This report undermined the deal’s stated aim of bringing foreign money into Russia.
Rosneft has since denied the report.
The Russian oil company’s ties in Qatar are not limited to QIA. In 2019, Qatar University’s engineering department signed an agreement with Rosneft on cooperation in research and technology development in the oil and gas industry.
In 2018, the Russian oil giant established its Research and Development Center at Qatar Science & Technology Park (QSTP), a member of Qatar Foundation.
The agreement served as a strengthening factor in the exchange of knowledge and expertise between Qatar and Russia in the science and technology sector.
Qatar’s efforts in de-escalating Russia’s aggression in Ukraine
The Amir Sheikh Tamim bin Hamad Al-Thani has recently called on all parties to “exercise restraint and resolve the dispute through constructive dialogue and diplomatic methods.”
He also reiterated the need to place the humanitarian situation of Ukrainian civilians as a “top priority and to ensure their safety.”
The statements were made after he received a phone call Thursday morning from Ukrainian President Volodymyr Zelenskyy, where the latter briefed the Amir on the latest developments in Ukraine.
The Qatari Foreign Minister, Sheikh Mohammed bin Abdulrahman Al-Thani in phone calls with his Russian and Ukrainian counterparts, also stressed the need to abstain from threat and the use of force whilst adhering to the “sovereignty, independence and territorial integrity of states.”
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