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. Last Updated: 07/27/2016

Glencore Buys Stakes in Russneft Holdings

Swiss-based oil trader Glencore has bought into Russia's Russneft, the fastest-growing player in the world's No. 2 crude exporter, branching out of its core trading business to invest in a company it helped create.

"Glencore, through its subsidiaries, has entered into the Russian upstream market with its strategic partner Russneft, with ownership in a diversified portfolio of oil-producing assets," Glencore's web site said.

It was not immediately clear when the information was posted on Glencore's site.

Glencore said that in February it bought between 39.8 percent and 49 percent in Varyoganneft in western Siberia and the Ulyanovskneft and Nafta-Ulyanovsk units in the Volga region -- some of Russneft's biggest oil production units.

Traders said the move was a change of tack by Glencore, which has never before admitted to investing in Russneft.

Russneft was founded less than three years ago by former Slavneft head Mikhail Gutseriyev, who set it up with his business partners and Glencore.

After a meteoric rise, Russneft now has 25 production firms and 600 million tons of oil reserves (4.4 billion barrels) and is poised to enter the top 10 of Russian producers.

Its annual results, released on Wednesday and calculated to Russian Accounting Standards, showed a fivefold leap in net profit to 4.74 billion rubles ($166 million) in 2004, and a fourfold hike in sales to 27.5 billion rubles.

They also revealed that the firm had secured a loan from BNP Paribas on the strength of a sales contract with Glencore Energy U.K., helping it to double debt to almost $1 billion.