Lukoil, Russia’s second-largest oil producer, has announced an agreement to sell most of its international assets to American private equity firm Carlyle Group. The deal, which requires US approval, comes after a previous bid was rejected. Lukoil has been targeted by US sanctions, prompting the company to divest its overseas holdings worth $22 billion.
The US imposed broad sanctions on Russia’s oil sector in February 2022, following the escalation of the Ukraine conflict. The sanctions have affected major oil companies, including Rosneft, Gazprom Neft, and Surgutneftegas, as well as their subsidiaries. American firms are banned from doing business with Russian oil companies, and the US has joined the G7 price cap on Russian energy. Additionally, restrictions have been imposed on over 180 oil tankers and ships.
Lukoil’s transaction with Carlyle Group is subject to regulatory approvals, including clearance from the US Treasury’s Office of Foreign Assets Control. The company has not disclosed the financial terms of the deal but stated that it is continuing talks with other potential buyers. The agreement does not include Lukoil’s assets in Kazakhstan.
According to reports, around ten global investors, including Exxon Mobil, Chevron, and Saudi Arabia’s Midad Energy, had expressed interest in purchasing Lukoil’s assets. A previous offer from Swiss-based trader Gunvor Group collapsed in November after the US Treasury accused the firm of having ties with Moscow.
Carlyle Group, founded in Washington in 1987, manages around $474 billion in assets. The company has long-standing business ties to US President Donald Trump, having partnered with him in a $1.8 billion deal in 2005. The firm’s co-founder, David Rubenstein, is reportedly a friend of Trump’s.
The deal between Lukoil and Carlyle Group awaits approval from US authorities. If successful, it will mark a significant development in the ongoing saga of Russian oil companies navigating US sanctions. The outcome of the transaction will be closely watched, given the complex geopolitical landscape and the significant stakes involved.
