ROSNEFT’S advisers closed the Russian oil group’s $11 billion (£6 billion) initial public offering a day early yesterday after strong demand from potential investors.

Buoyed by news that the Financial Services Authority (FSA), the UK regulator, would not intervene in Rosneft’s flotation, bankers advising it declared the IPO oversubscribed and closed the order book to other investors.

In addition, the advisers have told City institutions already on the book that they would have to pay at least $7.15 per Rosneft global depository receipt (GDR), which will represent one ordinary share, if they want to ensure a stake in the company. The GDRs will be priced today ahead of conditional trading tomorrow.

At the mooted minimum price, Rosneft will be worth at least $73 billion.

The advisers — ABN Amro Rothschild, Dresdner Kleinwort Wasserstein, JPMorgan and Morgan Stanley — had originally set a $5.85 to $7.85 indicative price range but have been encouraged by the strong interest shown by strategic investors including BP, Britain’s largest company, Petronas, the Malaysian energy giant, and CNPC, of China. BP expects to emerge with a stake worth about $1 billion, although it and its peers could see the level of their shareholdings in Rosneft scaled back if City institutions are willing to pay towards the top end of the adjusted GDR price range.

Rosneft’s flotation ambitions received a boost late on Tuesday when the FSA informed Yukos, Rosfneft’s rival, that it would not block Rosfneft’s IPO. Yukos had made a lengthy submission to the FSA calling for the flotation be blocked amid allegations that Rosneft was the illegal owner of Yuganskneftegaz. Yuganskneftegaz was the dominant asset of Yukos until it was sold at a Kremlin-ordered auction in December 2004 to recover huge back-taxes levied against Yukos.

Yukos has always claimed that the tax charges were politically motivated and threatened to pursue Rosneft through the courts.

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