On January 29, Lukoil - Russia's second largest oil producer - said it had reached an agreement to sell most of its assets abroad, estimated at about 22 billion USD, to the US private investment fund Carlyle Group, but is still awaiting approval from the US government.
Due to US sanctions related to Russia's actions in Ukraine, the US Treasury Department has given Lukoil a deadline of February 28 to sell its global portfolio.
If the deal is completed, this will be the end of Lukoil's strategy of expanding abroad - the Russian oil company with the largest exposure to international energy markets.
In a statement, Lukoil said it had agreed with Carlyle to sell its subsidiary LUKOIL International GmbH - the unit managing the group's overseas assets.
This portfolio includes operations in Europe, the Middle East, Africa, Central Asia and Mexico, spanning from controlling shares in the large-scale West Qurna 2 oil field in Iraq to oil refineries in Bulgaria and Romania.
The signed agreement is not exclusive to the company and also depends on a number of preconditions, including applying for necessary management approvals, including permission from the Foreign Assets Administration (OFAC) of the US Treasury Department for a deal with Carlyle," Lukoil's announcement stated.
However, Lukoil noted that the deal does not include the company's assets in Kazakhstan. Previously, on January 28, Kazakhstan announced that it had submitted an official request to the US to buy back Lukoil's shares in energy projects in this country, including the Caspian Pipeline Consortium pipeline - Kazakhstan's key oil export route - and the country's largest oil field, Tengiz.
Carlyle also issued a statement affirming that the deal depends on the appraisal process and related legal approvals. Currently, Carlyle manages $474 billion in assets, spanning three business lines and 660 investment vehicles.
In addition to Lukoil, Rosneft - Russia's largest oil producer - was also sanctioned by the US in October last year, because Washington believed that the peace negotiation process between Russia and Ukraine was slow. These measures are part of US President Donald Trump's efforts to put pressure on Russia to agree to an agreement to end the conflict in Ukraine.
