MOSCOW (Reuters) - The Russian government has completed the sale of a controlling stake in mid-sized oil producer Bashneft <BANE.MM> to the Kremlin-owned Rosneft <ROSN.MM> for 329.69 billion roubles ($5.30 billion), the economy ministry said on Wednesday.

The sale is a part of a government privatization drive aimed at narrowing the state budget deficit.

The ministry, citing the minister, Alexei Ulyukayev, said Rosneft's bid was higher than a valuation of between 297 billion roubles and 315 billion roubles, while the unidentified second bidder offered a lower bid.

President Vladimir Putin said earlier on Wednesday that Russia's privatization drive will be more efficient after Rosneft purchases the state's stake in Bashneft.

(Reporting by Vladimir Soldatkin; Editing by Adrian Croft)