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Lukoil, Russia’s second-largest oil producer, on Monday unveiled plans to sell its international assets, just days after the US imposed sanctions on the company as part of efforts to pressure Vladimir Putin into agreeing to an immediate ceasefire in Ukraine.
Lukoil proposes to “sell its international assets” after the “introduction of restrictive measures against the company and its subsidiaries by some states”, it said in a statement. “The consideration of bids from potential purchasers has been started.”
US President Donald Trump last week imposed what he called “tremendous sanctions” on Rosneft and Lukoil, Russia’s two largest oil producers and exporters, aiming to “degrade” Putin’s war chest and bolster Washington’s faltering push to end the war in Ukraine.
While the current level of economic pressure is unlikely to shift the Kremlin’s stance on the war, Lukoil’s announcement suggests that Trump’s move against Russia’s energy sector is having a swift impact.
Unlike Rosneft, which is state controlled, Lukoil is a private company, but some analysts say it aligns itself with the Kremlin’s interests.
The company has significant assets in Europe, as well as Azerbaijan, Kazakhstan, Iraq, the United Arab Emirates, Egypt and Nigeria.
Lukoil’s European assets include refineries — two fully owned in Bulgaria and Romania, and a 45 per cent stake in a third in the Netherlands — as well as energy storage facilities and petrol station networks across Bulgaria, Romania, Croatia, Serbia, Montenegro and North Macedonia.
The sale of the Bulgarian refinery is complicated by new restrictions introduced by Sofia following the US sanctions.
Any potential transactions involving Lukoil’s assets in the country — particularly the 190,000 barrels-per-day refinery in the coastal city of Burgas, the country’s only such facility — now need the state’s approval.
Moscow-based brokerage BCS estimates Lukoil’s European assets account for about 5 per cent of its earnings before interest, tax, depreciation and amortisation, down from 11 per cent before Russia’s full-scale invasion of Ukraine.
Lukoil said the sale of its international assets is being conducted in line with a licence issued by the US Treasury’s Office of Foreign Assets Control to wind down its transactions with it.
The company must in theory sell its international assets by November 21, when the US Treasury will begin treating any transactions with the company as violations of Washington’s sanctions.
Lukoil said that, if needed, it intends to apply for an extension of the Ofac licence “to ensure uninterrupted operations of its international assets”.
