U.S. private equity firm Carlyle Group has agreed to buy most of Lukoil's $22 billion worth of foreign assets, which Russia's second-largest oil company is forced to sell because of U.S. sanctions.
The planned sale, announced by both companies on Thursday, comes just as Russian, Ukrainian and U.S. negotiators try to reach a deal to end the Ukraine war, and would mark the end, for now, of Lukoil's attempt to become a global player.
Neither Lukoil nor Carlyle gave a price for the asset sale, which still requires approval from the U.S. agency which administers sanctions. The U.S. Treasury had given Lukoil until February 28 to sell its global portfolio.
"Carlyle's approach to LUKOIL International would be on ensuring operational continuity, preserving jobs, stabilizing the asset base and supporting safe, reliable performance across the portfolio by bringing to bear dedicated oversight and international operating capabilities," Carlyle said in a statement.
Lukoil, which also announced the planned sale, said it was continuing negotiations with other potential buyers.
Russia, which accounts for about a tenth of global oil production, has faced a myriad of sanctions on its major companies since President Vladimir Putin sent tens of thousands of troops into Ukraine in February 2022.
In October, those sanctions were extended to Lukoil and Russia's largest oil producer Rosneft as part of U.S. President Donald Trump's attempt to force Moscow towards negotiating an end to the war.
Negotiations have intensified in recent weeks and Trump envoys have repeatedly underscored that Washington could help remove Western sanctions and re-integrate Russia into the global economy, including with investments in Russia, if a deal was reached.
LUKOIL SELLS OUT INTERNATIONALLY
Lukoil said in a statement it had agreed with Carlyle to sell its unit LUKOIL International GmbH, which oversees the company's foreign assets.
These include operations in Europe, the Middle East, Africa, Central Asia, and Mexico, and range from a controlling stake in Iraq's sprawling West Qurna 2 oilfield to refineries in Bulgaria and Romania.
"The agreement signed is not exclusive for the Company and is subject to some conditions precedent such as procurement of necessary regulatory approvals including permission of the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) for the transaction with Carlyle," Lukoil said.
Carlyle said in a statement that the deal was conditional upon its due diligence and regulatory approvals.
Kazakhstan's Position
The Ministry of Energy commented on the possible sale of Lukoil's assets in Kazakhstan. According to Energy Minister Erlan Akkenzhenov, the ministry has a preemptive right to purchase such assets, as provided by law.
"The Ministry of Energy sent a letter of request to OFAC. The methods for purchasing this stake may vary and do not necessarily have to be tied to physical payment in cash. Various forms are possible, including deferred payment or through proceeds from the sale of raw materials," the minister told reporters.
He added that various options were currently being considered. Media reports surfaced earlier that the national Kazakh company KazMunayGas was exploring the possibility of buying Lukoil's assets in Kazakhstan.
Lukoil owns a 13.5% stake in the Karachaganak project and a 5% stake in Tengiz—Kazakhstan's largest oil and gas projects, jointly managed by Western oil companies. The company is also involved in large-scale joint offshore wind energy projects with a total capacity of 100 GW.
Lukoil also holds a 12.5% stake in the Caspian Pipeline Consortium (CPC), which exports oil from Kazakhstan to the Black Sea.
