There is a queue of buyers for Lukoil’s foreign assets
13 November 10:25
The international assets of the Russian oil giant Lukoil are attracting potential buyers from Egypt to Kazakhstan as the date of the US sanctions coming into effect approaches: deals must be concluded by November 21, [Komersant ] reports, citing Russian propaganda media.
The United States imposed sanctions on Lukoil in October and has already blocked one attempt by the Russian company to sell its foreign assets to the Gunvor trader.
The sanctions have led to disruptions in the operations of Lukoil’s subsidiaries in Iraq, gas stations in Finland, and a Bulgarian refinery.
The circle of contenders
Kazakh state holding KazMunayGas is studying the possibility of acquiring Lukoil’s local assets, two media sources familiar with the matter said.
“Lukoil owns a stake in Karachaganak, one of the world’s largest gas and condensate fields, along with Eni, Shell, Chevron and KazMunayGas. The decision on the new partnership will be made by the project participants, taking into account the sanctions, the Kazakh Energy Ministry said in a statement.
Shell is interested in Lukoil’s deepwater fields in Ghana and Nigeria, two other sources said. Shell declined to comment.
“Lukoil has notified the Egyptian government, where Lukoil holds three concessions, of a possible sale of assets, a fifth source familiar with the situation said. The Egyptian Oil Ministry did not respond to a request for comment.
The Moldovan government has started negotiations on nationalization of Lukoil’s infrastructure at Chisinau airport, airport director Sergiu Spoiala said on Tuesday.
Bulgarian President Rumen Radev has vetoed amendments to legislation that would have allowed the government to take control of the Lukoil-owned oil refinery in Burgas and sell it. Azerbaijan’s state-owned Socar and Turkey’s Cengiz Holding had jointly applied to buy the refinery before the sanctions were imposed.
Turkish media reported that Cengiz does not intend to withdraw the offer. The company did not immediately respond to a request for comment.
Lukoil’s options
Lukoil is facing a difficult choice, said Sergei Vakulenko, a senior fellow at the Carnegie Center in Berlin and former head of strategy at Gazpromneft.
According to him, if the company sells its assets, the proceeds may be frozen by the US Treasury.
However, if the decision is delayed, it is likely that some of the assets will be taken over by local authorities or frozen, said Vakulenko and Igor Yushkov of the Financial University under the Russian government.
According to Yushkov, Lukoil has no reason to hurry. The frozen assets will remain frozen and may return to the Russian company if the war in Ukraine ends and sanctions are eased.
Perhaps Lukoil will take advantage of the experience of Rosneft, whose three refineries were transferred to German control in 2022. Although Berlin controls the assets, Rosneft retains ownership.
