The situation is becoming so complicated that the implementation of the Russian company's plans would require a multi-stage transaction model.
According to sources cited by Bloomberg, despite the difficult situation on the markets and growing international pressure, interest in Lukoil's foreign assets is noticeable. At stake are both shares in the Iraqi West Qurna-2 oil field and gas projects in Central Asia. But the divergence of interests of potential investors significantly hinders the implementation of the scenario preferred by the Lukoil management.
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Lukoil assets for sale. Three companies among those interested
Bloomberg found that American energy companies Exxon and Chevron are analyzing the possibility of taking over Lukoil's shares in the Iraqi West Qurna-2 field — one of the largest oil deposits in the world. On the other hand Abu Dhabi National Oil Company (ADNOC), according to informants, is considering purchasing assets related to the Russian company's gas operations in Uzbekistan. These are the segments of Lukoil's foreign portfolio that seem the most attractive to investors.
At the same time, Reuters reported that in The American investment company Carlyle was also among those analyzing the possible purchase. Despite this, each of these companies focuses only on selected areas of Lukoil's operations, which is contrary to the expectations of the Russian management, which – as sources emphasize – is determined to sell the assets in one package.
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According to Bloomberg analysts the only real possibility of implementing such a scenario would be a two-step solution: first the sale of the entire foreign portfolio to one entity, probably a financial company, and then its gradual resale to individual interested investors. However, such an operation would require both regulatory approvals and the ability of the buyer to acquire the sanctioned assets.
The pressure of US sanctions and the previous failure of negotiations
Lukoil's situation became particularly tense after the US imposed sanctions at the end of October. The American authorities obliged the Russian giant to sell foreign assets by November 21. When the company asked the Treasury Department to extend the deadline, it was extended to December 13. However, there is still little time, and the lack of agreement with investors limits the possibilities for maneuver.
The Russian company has already made its first attempt to find a buyer by concluding a preliminary agreement with the Swiss-Russian oil trading company Gunvor. However, the transaction did not take place. The U.S. Treasury has clearly stated that Gunvor – Defined as “Kremlin puppet” — will not receive a license to conduct business or generate profits in U.S. jurisdiction. As a result, the company withdrew its interest in purchasing Lukoil's assets.
Łukoil was established in 1991 from the merger of three state-owned fuel plants
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Currently, the concern is faced with the need to develop an alternative sales scenario that will enable the implementation of the sanctions requirements and, at the same time, ensure the preservation of the value of the foreign portfolio. Time is running out and investor interest – although real – remains dispersed, which makes negotiations extremely difficult. In the coming weeks, it will become clear whether Lukoil will manage to find a buyer who will meet both the company's expectations and the restrictive conditions of the American authorities.
