Rosneft, the Russian oil giant, has halved the amount it plans to raise when it floats on the London and Moscow stock markets this summer, after the recent renewed surge in crude oil prices helped to bolster its financial position.
The state-owned mining and exploration group now plans to raise between $8bn (£4.4bn) and $10bn when it comes to market, rather than the $20bn it had originally been hoping for. The company's priority is to have at least enough to pay off a $7.5bn loan, which it took out last year to buy a controlling stake in Gazprom, the Kremlin-run gas company.
The float is still expected to be one of the world's largest ever initial public offerings, but will no longer come in above the Japanese telecoms provider, DoCoMo, which raised almost £10bn when it came to market seven and a half years ago.
The City continues to be divided in its attitude towards the Rosneft float, with several major institutions calling for further transparency before they agree to buy into the company. Others have said they have no problem with the company's current governance or its past.
Rosneft has had a chequered history, with some institutions still unhappy with the opacity surrounding its take-over of Yuganskneftegaz - its main oil field - from Yukos in December 2004.
Yukos was forced to put Yugansk up for sale after the Russian government landed it with a tax bill for some $28bn - which the company argued was a penalty for its anti-Kremlin views. Rosneft was then given the chance to pick up the asset for a fraction of its market price at a state-organised auction. Last year, Yukos' chief executive, Mikhail Khodorkovsky, was convicted of fraud and tax evasion, before being sentenced to eight years in jail. His supporters said the trial was politically driven.
Directors at the London Stock Exchange are believed to be meeting this week to discuss the Rosneft float and are known to have reservations with such a large Russian company floating on the market at a time when a UK executive has been banned from entering Russia.
Bill Browder, the chief executive of Hermitage Capital Management, a major investor in the region, was unexpectedly barred from the country towards the end of last year. Although the reason for his exclusion is not known, it is thought that it may have something to do with a lawsuit he filed recently against a small oil company close to the state.
Clara Furse, the LSE's chief executive, last week wrote to President Vladimir Putin, asking for the ban to be listed, explaining that it would not reflect well on western perceptions of Russian governance.
In a strongly worded letter, Ms Furse said: "Left unresolved, I am concerned that this situation may do significant damage to Russia's reputation as a country that welcomes foreign investors. If the single largest investor in the Russian market can be arbitrarily denied entry into the country, that would send a very negative signal to other parties seeking to invest in Russian companies."
Rosneft's chairman, Igor Sechin, is the deputy head of President Putin's administration and one of the most powerful political and corporate figures in Russia.
Mr Putin hit back at the criticism at Russian companies last week, accusing the West of hypocrisy and double standards. In a press conference in Germany, he said: "When it's coming to us, it's investment and globalisation, and when we intend to arrive, it's the expansion of Russian companies," he said.
The City row over Rosneft has put the Financial Services Authority under pressure to clarify the corporate governance rules surrounding the listing of foreign companies on the London market. F&C Asset Management was one institution to speak out against the lack of clarity over the current situation.Reuse content