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MOSCOW—Russia sold a 19.5% stake in state-controlled oil giant PAO Rosneft to a consortium formed by Glencore PLC and Qatar in a deal valued at some €10.5 billion ($11.3 billion), bringing much-needed cash to Russia by selling off a portion of one of its crown jewels.

Russian President Vladimir Putin and Rosneft Chief Executive Igor Sechin met late Wednesday to discuss the deal, and the Kremlin posted a transcript of their meeting on its website disclosing the deal.

Russia has long suggested it could sell a stake in Rosneft, the world's largest-listed oil producer, but held off until weak oil prices and a two-year recession starved the federal budget, apparently forcing the Kremlin's hand.

The Russian state will keep a controlling stake in Rosneft, which is also partly owned by U.K. oil major BP PLC. Mr. Sechin said Glencore and the Qatar Investment Authority sovereign-wealth fund would each take half of the stake.

A Glencore spokesman declined to comment. Qatar's fund couldn't immediately be reached for comment.

The sale of a stake to Switzerland-based mining company Glencore and the Qatar sovereign-wealth fund is a boon for Mr. Putin, whose country is under sanctions from the U.S. and the European Union over its military interventions in Ukraine.

Russia has largely looked to China for investments, and Chinese and Indian state-owned energy companies were seen as likely buyers for the Rosneft stake, but this deal shows the Kremlin has other options. Rosneft is among the companies under U.S. sanctions that restrict its ability to raise debt in U.S. dollars.

In a meeting in the Kremlin late Wednesday, Mr. Putin congratulated Mr. Sechin on the deal, saying the sale came at a favorable time, as the oil price rose after the Organization of the Petroleum Exporting Countries agreed on production cuts last week. Russia has also agreed to trim its crude output.

For Glencore, the investment ends a deal-making drought. Chief Executive Ivan Glasenberg has been focused on selling assets and paring back debt since the firm's stock plunged last year amid a collapse in commodity prices. The company suspended its dividend and sold assets ranging from Peruvian gold to stakes in its Canadian agricultural business.

Last week, Glencore marked a turning point when it said it planned to reinstate its dividend next year. The move was in part vindication for Mr. Glasenberg, a highflying CEO whose aggressive investment strategy and reliance on sky-high debt fell under a shadow as commodity prices plunged in 2015 amid slowing demand from China and elsewhere.

Mr. Glasenberg, in a call with analysts, last week hinted at a renewed appetite for deals, saying that Glencore will be "opportunistic about what we can look at to grow this company."

Glencore captured headlines in last 2014 after it was disclosed that the Mr. Glasenberg had made overtures to merge with Anglo-Australian mining giant Rio Tinto PLC. Such a deal quickly became untenable as commodity prices plummeted, ravaging miners' stocks and forcing them to restore their savaged balance sheets.

Rosneft has moved more recently to consolidate the Russian state's control of the oil sector, acquiring a controlling stake in midsize Russian oil producer PAO Bashneft in October for the equivalent of around $5 billion. Rosneft bought rival TNK-BP in 2013 in a $55 billion deal.

Some government ministers have long pressed for the sale of a stake in Rosneft. But Mr. Sechin has fought to preserve and increase state control over the oil sector, which provides critical revenues to the federal budget.

Write to James Marson at james.marson@wsj.com and Scott Patterson at scott.patterson@wsj.com

(END) Dow Jones Newswires

December 07, 2016 16:25 ET (21:25 GMT)

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