Sanctioned Russian Oil Giant Lukoil Agrees to $22 Billion Asset Sale to Carlyle
The deal for Lukoil's international unit hinges on a green light from the U.S. Treasury amid ongoing sanctions.
Russia’s second-largest oil producer, Lukoil, announced today it has reached an agreement to sell most of its foreign assets to U.S. private equity firm Carlyle Group, a transaction valued by analysts at around $22 billion.
The deal is for Lukoil’s subsidiary, LUKOIL International GmbH, which oversees the company’s assets outside of Russia. However, the sale is contingent on securing approval from the United States government.
Lukoil specified that the transaction requires a license from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) to be finalized.
The company, along with Russia’s largest oil firm Rosneft, has been under U.S. sanctions since last October. Washington imposed the measures in response to what it described as slow progress in peace talks between Russia and Ukraine.
The U.S. Treasury has already blocked two prior attempts by Lukoil to offload the assets. An initial deal with Swiss-based trading group Gunvor was thwarted in October, followed by a proposed share swap in December organized by Xtellus Partners, the former U.S. arm of Russian bank VTB.
The Treasury Department has given Lukoil a deadline of February 28 to divest its foreign holdings.
