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16

Russian State Oil Giant Cut IPO Share Sale

Rosneft appears to be drastically scaling back its IPO plans

Rosneft appears to be drastically scaling back its IPO plans from what would have been the biggest share sale in world history -- up to $20 billion -- to a more modest $10 billion.

Reports of the lower IPO target, first published by British media on Monday, followed a wave of criticism last week from Western investors about corporate governance at the state-owned oil major and legal risks associated with its acquisition of Yukos assets.

Asked about the value of the upcoming IPO, Rosneft chief financial officer Peter O'Brien emphasized the company's rapidly improving financial situation.

"Our financing needs have come down substantially as a result of a number of developments over the past six to nine months: higher current and projected oil prices, our growing production and lower borrowing costs," O'Brien said by telephone Tuesday.

He declined to put a target price on the share sale.