Carlyle, Chevron-backed group lead race for Lukoil assets, sources say

Private equity firm Carlyle Group and a consortium including Chevron, Quantum Capital Group and Abu Dhabi–based International Holding Company are emerging as leading contenders for the global assets of Russia’s Lukoil, as a US deadline to divest approaches, sources said.

The United States imposed sanctions on Lukoil and rival Rosneft in October in an effort to pressure Moscow towards a peace settlement with Ukraine, Caliber.Az reports per British media.

Under the measures, Lukoil has been given until January 17 to sell its overseas portfolio, which sources estimate is worth about $22 billion.

The assets span oil fields across several countries, including Iraq, Azerbaijan and Kazakhstan, as well as refineries and fuel retail networks in Europe and the United States.

Lukoil’s international operations have been disrupted by sanctions, restricted access to banking services and, in Iraq, the nationalisation of its largest producing asset, the West Qurna 2 oil field.

According to four industry sources, Lukoil has been holding discussions with potential buyers since November. Carlyle declined to comment on the talks. Chevron and Quantum Capital Group also declined to comment, while International Holding Company did not respond to a request for comment.

Any transaction would require approval from the US Treasury Department’s Office of Foreign Assets Control (OFAC), in line with US sanctions regulations. Several sources said OFAC could extend the current general licence, allowing negotiations to continue beyond the January 17 deadline.

Alternatively, the regulator could issue individual licences to one or more bidders before the deadline, according to another source.

The Treasury Department has so far blocked two proposed transactions involving Lukoil. These included a potential deal with Swiss trading firm Gunvor in October and a share-swap arrangement structured by Xtellus Partners, the former US arm of Russia’s VTB bank, in December.

By Aghakazim Guliyev