The Russian government will sell a 19.5% stake in oil company Rosneft, in which it holds a majority stake, to Glencore and Qatar Investment Authority (QIA). The Swiss commodity trading company and Qatar's state-owned holding company will pay €10.2bn (£8.69bn) in exchange for the same.

The deal was announced by Russian President Vladimir Putin's press secretary on Wednesday, 7 December. Terming the deal a "very good result", the president congratulated Igor Sechin, the CEO of Rosneft, for succeeding in closing the deal.

The Rosneft CEO said the deal included an "offtake" oil supply contract with Glencore. Apart from this, a joint venture would be created with both Glencore and QIA to invest in both Russian and international projects, Sechin said.

The CEO said the deal would be financed by investors and with the help of a financing package organised by "one of the largest European banks".

Post completion of the deal, the Russian government would continue to retain a majority stake in Rosneft. Meanwhile, the UK oil company BP will also continue to hold its 19.75% stake in the Russian oil giant.

Glencore confirmed the news in a statement. The Swiss company said it was in final-stage negotiations over the deal, expected to close in mid-December. Glencore, however, added that the deal closure was subject to certain factors such as the finalisation of all relevant financing and other agreements.

Glencore further explained that while it was committing €300m towards the deal, the remaining portion would be financed by QIA and by non-recourse bank financing.

It added that one of the material terms of the deal was the offtake agreement with Rosneft. This five-year agreement added 220,000 bbl/day for its marketing business. The Rosneft deal also presented it with other opportunities in infrastructure, logistics and global trading segments, Glencore said.

According to the Financial Times, this deal is one of the largest ever investments that has flown into Russia. It is also said to be the largest investment deal under a privatisation programme launched by the Russian government at the start of the year.

The deal marks a big win for the Russian president as it comes at a time when the government is cash-strapped, and because it comes despite US and EU financial and technological sanctions against Rosneft.