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(Bloomberg) — Sanctioned Russian oil producer Lukoil PJSC has agreed to sell its international assets to energy trader Gunvor Group.
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Lukoil, Russian No. 2 oil producer, had previously announced plans to sell its international operations after being hit by US sanctions last week. It has accepted an offer from Gunvor for Lukoil International GmbH and made a commitment not to negotiate with other potential buyers, Lukoil said in a statement on its website.
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Gunvor, which has a long history in Russia, declined to comment. Its co-founder Gennady Timchenko was himself placed under US sanctions in the wake of Russia’s annexation of Crimea in 2014. The US government claimed at the time that Russian President Vladimir Putin had “investments in Gunvor” — something the company has consistently denied. It is now majority owned by co-founder and chief executive officer Torbjorn Tornqvist.
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The deal is subject to clearance from the US Treasury’s Office of Foreign Assets Control, along with other applicable authorizations.
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Lukoil is the most internationally diverse of Russia’s oil giants. Lukoil International, headquartered in Vienna, oversees more than 100 subsidiaries in around 50 countries worldwide, according to the unit’s LinkedIn profile.
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Lukoil International’s 2023 annual report shows it had equity of 19.1 billion euros ($22.2 billion), meaning the deal is likely to be significant in size and underscoring the company’s vast scale in global oil markets. Its trading arm Litasco, which operates from Geneva and Dubai, bought and sold an average of 1.19 million barrels a day last year, according to its annual report.
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The Russian company’s upstream businesses include minority stakes in projects in former Soviet countries such as Kazakhstan, Uzbekistan and Azerbaijan, as well as in Egypt, the United Arab Emirates and a number of African nations. Their share in Lukoil’s total crude production last year was only 5%, according to the company’s annual report.
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One notable exception is Iraq, where Lukoil holds 75% of the giant West Qurna 2 oil project and 80% in Iraq’s Block 10 in the same area.
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The Russian producer also has a network of more than 5,300 retail fuel stations in 20 countries, including the US, as well as refineries in Europe.
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English (US)