Lukoil, Russia’s second-largest oil producer, is facing disruptions to its international operations due to US sanctions. The company’s global footprint spans upstream oil and gas projects, refining, and fuel retail networks across Africa, Europe, Central Asia, the Middle East, and the Americas. Lukoil produces half a million barrels of oil per day outside of Russia, accounting for 0.5% of global oil output, in countries such as Iraq, Kazakhstan, and Azerbaijan.
In the Middle East, Lukoil operates Iraq’s West Qurna 2 oilfield, one of the world’s largest, with a 75% stake. However, the company has declared force majeure at the field after Iraq halted all cash and crude payments to Lukoil. The company also holds stakes in oilfields in Egypt, the UAE, and other countries in the region.
In Central Asia, Lukoil has significant interests in Kazakh oil and gas projects, including a 13.5% stake in Karachaganak and 5% in Tengiz. The company also owns nearly 20% of the BP-operated Shah Deniz gas field in Azerbaijan and operates the South-West Gissar gas field in Uzbekistan.
Lukoil’s international operations are facing challenges due to US sanctions, which have also affected its refining assets in Bulgaria, Romania, and the Netherlands. The company’s trading arm, Litasco, holds a 45% stake in the Zeeland refinery in the Netherlands. In response to the sanctions, Bulgaria’s parliament has passed legislation allowing the government to take control of Lukoil’s Neftohim Burgas refinery, citing national security concerns.
The company’s fuel retail business is also being impacted, with some of its stations in Finland running out of fuel due to halted deliveries linked to the sanctions. Lukoil owns approximately 430 stations in Finland and has a significant retail presence in several countries, including Moldova, Bulgaria, and Turkey.
The US sanctions have significant implications for Lukoil’s global operations, and the company is facing growing disruptions to its international business. The sanctions are part of a broader response to Russia’s actions in Ukraine, and their impact on Lukoil’s operations is likely to be felt for some time. As the situation continues to unfold, it remains to be seen how Lukoil will navigate the challenges posed by the sanctions and maintain its position in the global energy market.
