Romania may take away Lukoil’s licenses in the Black Sea – what is known
3 December 13:53
Romania has taken another step towards strengthening its energy security – the government has approved a special decree allowing the state to take control of the assets of companies under international sanctions. The most obvious target of the new mechanism is Russia’s Lukoil, one of the key players in Romania’s fuel market, Reuters reports, "Komersant Ukrainian"
Romania’s coalition government has approved a document that gives the state the right to intervene in the activities of companies under sanctions if their presence threatens energy stability, leads to price spikes or disrupts market functioning.
In particular, the decree allows the government to:
- appoint special administrators to sanctioned companies;
- temporarily or permanently take control of assets;
- including infrastructure, gas stations and exploration licenses.
Why Lukoil is in the spotlight
Lukoil is one of the largest players in the Romanian fuel market:
- 320 filling stations across the country,
- the third largest refiner in the country, accounting for 25% of domestic consumption,
- gas exploration rights in the Black Sea (Trident sector).
Currently, the company’s refinery has been out of service for several weeks due to maintenance, coinciding with the highest inflation in the EU, which has increased the government’s concerns.
Does this mean immediate nationalization?
Not necessarily. Prime Minister Ilie Bolojan said that the decision on nationalization of Lukoil gas stations will be made in December.
At the same time, three private companies are already negotiating to buy the assets from the Russian corporation.
What will happen to gas licenses in the Black Sea?
The decree gives Bucharest the right to take control of Lukoil’s offshore projects in the blocks:
- Trident,
- Est Rapsodia blocks.
Lukoil owns 85% in these projects, and state-owned Romgaz has a minority stake. The license is valid until 2026, but, according to Reuters sources, initial drilling results have not shown significant gas deposits.
Will Romania follow Bulgaria’s lead?
Last month, Bulgaria adopted a similar law to enable it to take state control of the Lukoil Neftohim refinery, one of the largest in the region.
Analysts do not rule out that Romania is moving in a similar direction.
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What is known about the US sanctions against Lukoil?
In late October, the United States imposed sanctions on Lukoil as part of a campaign to pressure the Kremlin to end the war in Ukraine. Within a month, all companies that do not want to be subject to secondary US sanctions must end any cooperation with the Russian oil giant. “Lukoil, for its part, has announced the sale of its foreign assets.
According to the sources, interest in Lukoil’s portfolio abroad has increased in recent days, and potential buyers from the US, Europe and the Gulf countries have applied to the US Treasury for approval of transactions with the company. The day before, Reuters sources reported that Lukoil’s assets could be sold to Carlyle, a large American investment fund. It is currently studying a possible deal and preparing to submit an application to the US Treasury, the sources said.
Prior to that, Washington blocked the sale of Lukoil’s assets to the Swiss trader Gunvor, which is associated with a friend of Russian President Vladimir Putin, Gennady Timchenko. The US Treasury Department called the company a “Kremlin puppet.”
“Lukoil owns three refineries in Europe, stakes in fields in Kazakhstan, Uzbekistan, Iraq, Mexico, Ghana, Egypt and Nigeria, as well as hundreds of gas stations around the world, including the United States.
