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* Rosneft buys 50.1 pct of Bashneft for 330 bln rbls
* Rosneft 19.5 pct stake sale seen by end-2016
* Rosneft may buy part of 19.5 pct stake on its own
* Rosneft privatisation to bring another 700 bln rbls (Adds further details, comments, background, wraps stories)
By Oksana Kobzeva and Darya Korsunskaya
MOSCOW, Oct 12 (Reuters) - The Russian government's sale ofa controlling stake in mid-sized oil firm Bashneft tothe country's largest oil producer Rosneft should givemomentum to Russia's privatisation drive, President VladimirPutin said on Wednesday.
The Economy Ministry said that the government had completedthe sale of the Bashneft stake to Kremlin-owned Rosneft for329.69 billion roubles ($5.30 billion).
Rosneft bought a 50.08 percent stake in Bashneft, Russia'sfastest growing oil company with production of 400,000 barrelsper day (bpd) and extensive refining assets, beating an offerfrom an unidentified second bidder.
The sale is a key step in a government privatisation pushmeant to raise cash to plug budget holes amid low oil prices andWestern sanctions imposed over Ukraine.
"The main thing is that we don't stop the privatisationprocess on this (Bashneft sale)," Putin said at an economicforum.
"This privatisation is carefully crafted, keeping in mindthe synergy effect for obtaining the maximal gain from the pointof view of budget and fiscal interests," he said.
Putin said that now a 19.5 percent stake in Rosneft could besold to private foreign investors.
The Bashneft deal has caused tensions, with the governmentpostponing the sale in August to calm rivalry among powerfulgroups before September parliamentary elections.
Several Russian government officials including Deputy PrimeMinister Arkady Dvorkovich had said previously they opposedplans by Rosneft Chief Executive Igor Sechin to expand further.
One state-controlled company, Rosneft, buying another,Bashneft, could hardly be called a proper privatisation, theysaid.
"It may sound strange to you but I personally was surprisedby this government's position myself," Putin said on Wednesday,referring to the decision to allow Rosneft to buy Bashneft.
Putin said later on Wednesday that Rosneft used its ownfunds to buy the Bashneft stake, where 25 percent is owned byinternal republic of Bashkortostan. It remains unclear ifRosneft will buy that stake later, too.
Rosneft production stands at around 4.1 million bpd now andis expected to grow thanks to new fields coming onstream thisyear.
According to a regulatory statement, Bashneft's board plansto vote on a new chief executive on Thursday. Alexander Korsik,who oversaw Bashneft's production spike, is expected to bereplaced by Andrey Shishkin, a vice-president at Rosneft.
A source familiar with the situation said the managementboard was also expected to be taken over by Rosneft managers.Bashneft declined comment.
Sechin has said that the purchase of Bashneft would providea synergy effect for the company.
Rosneft is considering buying out part of the Rosneft stakeset for privatisation itself, as one of the options.
The state hopes to raise around 700 billion roubles from theRosneft privatisation to plug holes in the budget.
($1 = 62.2255 roubles) (Additional reporting by Alexander Winning, Katya Golubkova,Denis Pinchuk, Elena Fabrichnaya, Kira Zavyalova, VladimirSoldatkin; writing by Andrey Ostroukh/Katya Golubkova, Editingby Adrian Croft)
