Drilling rigs: who is claiming Lukoil's assets

The U.S. Treasury Department has extended the permit for doing business with Lukoil's foreign assets until December 13 this year and until April 29, 2026, with its subsidiaries in Bulgaria. The Kazakh assets of the oil giant have been completely withdrawn from the sanctions. The Russian company said that negotiations are currently underway with several potential buyers, and a specific deal will be announced after reaching final agreements and obtaining the necessary approvals from regulators. The information about who is claiming the assets of the Russian major and which of them can be sold before the end of the year is in the Izvestia article.

What was allowed by the US Treasury

The Office of Foreign Assets Control of the U.S. Treasury Department (OFAC) has extended the authorization for operations with Lukoil International GmbH, Lukoil's foreign assets, until December 13. In addition, the agency allowed transactions involving some LUKOIL companies in Bulgaria — Lukoil Neftohim Burgas, Lukoil Bulgaria, Lukoil Aviation Bulgaria, Lukoil Bulgaria Bunker, as well as structures in which they have shares of at least 50%.

This temporary difference is most likely due to the fact that in Bulgaria, where the Lukoil plant in Burgas provides about 80% of fuel supplies to the domestic market, its shutdown can lead to catastrophic consequences — severe fuel shortages, skyrocketing prices and social unrest, says Valery Andrianov, Associate Professor of Finance at the Government of the Russian Federation..

— To prevent this, it is necessary to guarantee the operation of the enterprise for at least several months in advance. After all, for example, contracts for the purchase of raw materials are concluded in advance and if they are disrupted due to sanctions, the plant may be left without oil even in the case of a quick sale to another investor, the expert believes.

In addition, the United States decided to withdraw the Caspian Pipeline Consortium, Tengizchevroil and the Karachagansk field development project from its sanctions against Rosneft and Lukoil.

The document, published on the website of the US Treasury, states that it authorizes the provision of "services and other transactions related to the projects of the Caspian Pipeline Consortium, Tengizchevroil and Karachaganak."

It is noted that the license permits "all transactions" related to the operational activities of CPC, Tengizchevroil and the Karachaganak project. However, the document does not authorize "any transactions for the sale or transfer" of shares in CPC, Tengizchevroil and Karachaganak. Previously, the United States allowed transactions with Lukoil and Rosneft only to the Caspian Pipeline Consortium and Tengizchevroil.

Lukoil itself announced "negotiations on the sale of international assets with several potential buyers." "A specific deal will be announced after the final agreements have been reached and the necessary regulatory approvals have been obtained," the company said.

The company strives "to ensure the continuity of the enterprises' activities during the sale and transfer of assets to new owners. This will avoid the risks of disruptions in the work and supply of energy resources to the countries of presence, and save jobs." And in order to "promptly resolve emerging issues, Lukoil's specialists are in constant interaction with the authorities in the regions of operation."

This week, a Russian company applied for an extension by the U.S. Treasury Department of the deadline for completing operations with the company amid sanctions. This was reported by Reuters sources.

Izvestia sent a request to Lukoil.

Taking into account the extended OFAC licenses, it is correct to assume that any transaction for the sale of Lukoil's foreign assets will require the approval of the US Treasury Department, said Sofya Lukinova, head of the legal department at VMT Consult.

— This is due to the fact that companies in which Lukoil owns 50% or more are automatically placed under lockdown, and operations with such assets are prohibited until a separate permit is obtained. Extended general licenses only allow completing ongoing processes and conducting preparatory actions, however, the transfer of ownership is possible only after the issuance of a special license from OFAC," the Izvestia interlocutor notes.

Who is claiming the assets

After the US Treasury imposed sanctions on Russian Lukoil on October 21, the company announced a few days later that it intended to sell its foreign assets. On October 30, it became known that the international trader Gunvor made an offer to buy Lukoil International GmbH, a 100% subsidiary of Lukoil, which owns all foreign assets. However, the US Treasury Department saw the trader's connection with Russia and refused to issue a permit for the transaction.

Immediately after that, information about various applicants for Lukoil's foreign subsidiaries began to appear in the media. The main one was the American investment fund Carlyle Group. It is one of the world's largest companies engaged in direct investment, alternative asset management and financial services, managing assets worth $474 billion. This was reported by Reuters with reference to its sources. The companies did not comment on this information, and Western experts noted that Carlyle, unlike Gunvor, has every chance of obtaining a deal permit from OFAC.

In addition, three foreign companies have officially announced their intention to acquire Lukoil's assets in Romania. This was announced on Friday by the country's Energy Minister Bogdan Ivan. According to the publication Economedia, we are talking about the Hungarian MOL group, which is already present on the Romanian market, the Greek Hellenic Petroleum and the American Carlyle.

At the moment, there is no information about whether all foreign assets are claimed, for example, by the same Carlyle. But if this is the case, then other applicants are less likely to succeed, especially those who do not belong to American jurisdiction, says Olga Orlova, head of the Industry department at the Institute of Oil and Gas Technologies.

— Of course, if the European assets are owned by the American fund, the United States will have more opportunities to expand its oil and gas presence in the region. This includes the processing of raw materials, and, consequently, the purchase of oil, and sales. Currently, more than two thousand gas stations of the company are located in Europe," the expert notes.

Russian industry experts estimated Lukoil's foreign assets at $10 billion. At the same time, as Izvestia has already written, they did not rule out that the companies could be sold at a fairly large discount — up to 70%.

As for the Kazakh assets, according to Orlova, the decision of the US Treasury regarding them is quite logical.

"The participants of the Caspian Pipeline Consortium are both Russian and American companies, and oil enters the pipeline from these production projects," the source notes.

Is there enough time for transactions

The deadline until December 13, 2025 can be called a working one, but it is quite short, Sofya Lukinova, head of the legal department at VMT Consult, explained to Izvestia.

— During this time, it is realistic to conduct negotiations, prepare the structure of the transaction, perform a legal and financial audit, agree on the terms and submit a package of documents to OFAC, — the lawyer believes.

However, according to her, it is necessary to take into account that consideration of the application takes time, and the American regulator evaluates not only the transaction itself, but also the buyer, sources of financing and compliance of the operation with the sanctions policy.

— Additional deadlines will be required for approvals in the countries where the assets are located. Therefore, technically, there is enough time, but the schedule remains tight, and the successful implementation of the transaction depends on the willingness of the buyer and the speed of interaction with regulators," the Izvestia interlocutor believes.

Even if the asset is located in Europe or Kazakhstan, the legal logic remains the same: any transaction that directly or indirectly leads to the alienation of the authorized company's property falls under the jurisdiction of OFAC, Sofya Lukyanova recalled.

Therefore, a potential buyer must necessarily obtain an American permit for the transaction. At the same time, regulatory approval will be required from the countries where the assets are located, including antimonopoly, energy, or industry authorities, since in most jurisdictions a deal to change ownership of strategic facilities is impossible without local approval.

Valery Andrianov objects: in his opinion, it will be difficult to carry out the sale in such a short time.

— Most likely, we should expect another renewal of the OFAC license. Its short duration is more likely to ensure that Lukoil and potential buyers "do not relax," but it is unlikely that the American regulator thinks that a deal worth billions of dollars can be prepared and implemented in two to three weeks.

It's just that this is how the US Treasury "stands above the soul" of the parties to the transactions, and hurries them along, the expert suggests.