Sanctions Force Lukoil to Sell Assets to US Firm

Russian oil giant Lukoil has announced plans to sell its international assets to the U.S. private equity firm Carlyle Group. The move comes as the company races to divest its global portfolio ahead of a U.S. sanctions deadline.

While financial details of the proposed deal were not disclosed, Lukoil confirmed in a statement that the sale would not include its assets in Kazakhstan.

The Sanctions Deadline Driving the Sale

The sale is a direct response to sanctions imposed by U.S. President Donald Trump, aimed at pressuring Russia for a ceasefire in its war on Ukraine. The U.S. Treasury has given Lukoil until February 28 to sell its foreign holdings.

However, the transaction is not yet final. It still requires approval from the U.S. Office of Foreign Assets Control (OFAC), the agency responsible for administering sanctions. In the meantime, Lukoil stated it will continue negotiations with other prospective buyers.

Reactions from Carlyle and the Kremlin

Carlyle Group issued a statement highlighting its commitment to ensuring operational continuity and preserving jobs. The firm also acknowledged the "critical importance" of the assets to the energy security and infrastructure of the nations where they are located.

When questioned about the deal, the Kremlin stated it could not comment on corporate agreements. Kremlin spokesman Dmitry Peskov remarked, "For us, the most important thing is that the interests of the Russian company involved are protected and respected."

A Previous Bid and Political Pressure

This is not the first attempt to sell these assets. In October, the Swiss commodities trading firm Gunvor announced a proposal to buy Lukoil’s portfolio but later withdrew its offer.

The withdrawal followed accusations from the U.S. that Gunvor was "the Kremlin's puppet," a claim the Geneva-based company rejected. A November 6 post on X from the U.S. Treasury Department underscored the political climate, referencing President Trump's stance on the war and stating, "As long as Putin continues the senseless killings, the Kremlin's puppet, Gunvor, will never get a license to operate and profit."

Lukoil's Global Footprint Under Pressure

The sanctions put a significant portion of Lukoil's international business at risk. The company's global operations include:

• Stakes in oil and gas projects across 11 countries.

• Refineries located in Bulgaria and Romania.

• A 45% stake in a refinery in the Netherlands.

• Gas station networks in several countries.

The new sanctions, announced by Trump on October 22, target both Lukoil and Rosneft, Russia's two largest oil companies. Together, these firms account for approximately half of the country's oil exports, a major source of revenue for the Russian government.

The sanctions severely restrict their ability to conduct business outside of Russia by barring U.S. entities from dealing with them and threatening secondary sanctions against any foreign banks that handle their transactions.