Moscow
Reuters
—
Lukoil mentioned Thursday it had accepted a proposal from world commodity dealer Gunvor to purchase its foreign assets, which Russia’s second-largest oil firm is searching for to sell after Washington imposed sanctions on it final week.
The deliberate asset sale is probably the most consequential motion up to now by a Russian firm ensuing from Western sanctions imposed over the warfare in Ukraine, which started with Russia’s 2022 full-scale invasion of its neighbor.
Lukoil mentioned in an announcement it had accepted an offer from Gunvor to sell Lukoil International GmbH, which controls the oil main’s foreign assets.
“The key terms of the transaction have been earlier agreed by the parties. On its side, (Lukoil) accepted the offer, having undertaken not to negotiate with other potential buyers,” Lukoil mentioned of Gunvor’s supply.
Gunvor confirmed it was in talks with Lukoil over the doable acquisition of its foreign assets.
The U.S. Treasury Department has issued a license giving corporations till November 21 to wind down any transactions with Lukoil and Rosneft, one other Russian vitality agency focused by the brand new spherical of sanctions.
“If necessary, the parties plan to apply for an extension of the current license,” Lukoil mentioned.
The deal is topic to permission from the Treasury’s Office of Foreign Assets Control, it added.
Gunvor rose to prominence within the 2000s because the world’s largest dealer in Russian oil.
Its shareholders on the time included Gennady Timchenko, an in depth ally of President Vladimir Putin, who offered his stake in Gunvor after the U.S. focused him with sanctions following Russia’s 2014 annexation of Crimea.
Like many buying and selling homes, Gunvor has profited closely from a rally in oil and fuel costs that started with the outbreak of the warfare in Ukraine and Europe’s transfer to lower its dependence upon Russian vitality.
Gunvor and friends Vitol and Trafigura have used these income to purchase assets starting from refineries and oil fields to energy crops and wind farms.
Moscow-headquartered Lukoil accounts for round 2% of world oil output.
Its largest foreign asset is Iraq’s West Qurna 2 oil area, one of many world’s largest, by which it holds a 75% stake. The area’s output topped 480,000 barrels per day in April, Russia’s Interfax information company reported.
It additionally owns the 190,000 bpd Lukoil Neftohim Burgas refinery in Bulgaria, the most important within the Balkans, in addition to the Petrotel oil refinery in Romania.
Lukoil provides oil to Hungary and Slovakia, in addition to to Turkey’s STAR refinery, which is owned by Azerbaijan’s state oil firm SOCAR and relies upon closely on Russian crude.
Lukoil additionally holds stakes in oil terminals in addition to retail gasoline chains in Europe and owns upstream and downstream tasks in Central Asia, Africa and Latin America.