Rosneft cuts stake in Kurdistan pipeline subsidiary to save it from US sanctions

By Ahmed Rasheed and Nerijus Adomaitis

BAGHDAD, Nov 19 (Reuters) - Rosneft ROSN.MM has reduced its stake in the Kurdistan Pipeline Company (KPC) to less than 50% after talks aimed at protecting the subsidiary from U.S. sanctions, a Kurdistan Regional Government (KRG) official told Reuters on Wednesday.

The U.S. last month sanctioned Rosneft and Lukoil LKOH.MM, Russia's two largest oil companies, to pressure Russian President Vladimir Putin to end the war in Ukraine. The measures also apply to any entity in which the companies hold more than 50%.

KPC operates Iraqi Kurdistan's main oil pipeline, which transports crude from northern Iraq to its connection point at the border with the Iraq–Turkey pipeline.

"After consultations with the KRG, Rosneft sold part of its stake in the export pipeline project under pressure from recent U.S. sanctions," an official at the Kurdistan natural resources ministry said.

Rosneft sold an 11% stake to UAE-based DEX Capital, two sources familiar with the transaction told Reuters.

Rosneft acquired a 60% interest in KPC in 2017, with local KAR Group retaining 40%. At the time, sources said Rosneft's investment in the project was expected to reach about $1.8 billion.

Rosneft was not immediately available for comment.