Russian oil giant Rosneft said Friday it has settled its long-running dispute with rival Sistema over its controversial deal to acquire oil company Bashneft.

The two companies have been locked in a bitter legal battle over a deal dating back to 2016 under which Rosneft acquired Sistema's majority stake in Bashneft for 329.69 billion rubles, then worth some $5.2 billion.

But Rosneft accused Sistema of carrying out a reorganisation of Bashneft before it came under Rosneft's control, causing it to suffer losses now.

In August, a Russian court had ordered Sistema -- owned by tycoon Vladimir Yevtushenkov -- to pay 136 billion rubles in damages to Rosneft.

But Sistema appealed the decision and last week filed its own lawsuit against Rosneft, claiming damages of its own of 330.5 billion rubles.

However, in order to settle the dispute once and for all, Sistema had finally agreed to pay Rosneft 100 billion rubles ($1.7 billion) in compensation, Rosneft said in a statement.

The sum would be paid with the help of a government investment fund and Russia's Sberbank, Rosneft said, adding that the deadline for payment was March 30, 2018.

On Thursday, Russian President Vladimir Putin had told a meeting of business leaders, at which Rosneft's chief Igor Sechin and Sistema's Yevtushenkov were both present, that he hoped a deal could be reached.

Sistema shares rose by 17.73 percent on the Moscow Stock Exchange Friday on the news of the settlement.

Source: AFP