Gunvor sounds alarm over Europe’s fuel supply amid Lukoil asset takeover

Gunvor, an international commodity trader that is intent on acquiring all of Lukoil's international assets, warns that Europe could be faced with supply disruptions and job losses should the $22 billion deal get blocked by regulators.

The giant Russian oil producer has recently accepted its offer for the transaction, which is currently being assessed by US, UK and Swiss regulators, Caliber.Az reports citing Financial Times.

The assets include major oil refineries in Bulgaria and Romania, as well as fuel retail chains across Southeast Europe.

Gunvor's CEO, Swedish billionaire Torbjörn Törnqvist told the publication that the extension of the assets' operating license was the top priority at the moment, referring partially to the US Treasury Department's Office of Foreign Assets Control (OFAC).

"The magnitude of this deal needs regulatory work. It cannot be completed in two weeks. Lukoil’s whole international operations are paralysed. Nobody can transact with them. A lot of jobs are at stake and the refining capacity could be very disrupted,” Törnqvist said.

Lukoil’s facilities up for sale include the largest oil refinery in the Balkans – Lukoil Neftohim Burgas in Bulgaria, as well as the Petrotel-Lukoil refinery in Romania.

The Burgas refinery provides more than two-thirds of Bulgaria’s fuel supply, while the Petrotel facility in Romania accounts for about a third of the country’s refining capacity.

Russian oil producer Lukoil had recently accepted an offer from global commodities trader Gunvor Group Ltd. to acquire its international assets, which were put up for sale due to sanctions imposed by the United States over the war in Ukraine.

Gunvor is one of the world’s largest independent commodities trading houses by turnover and a leading global oil trader.

"If necessary, the parties plan to seek an extension of the current license issued by OFAC, as well as other permits, to ensure uninterrupted operational activities of the international assets and their banking services until the completion of the transaction," Lukoil's statement on the decision reads.

The sale of the company's foreign assets is related to the introduction of restrictive measures against the company by certain states, it said.

The US Treasury Department included Lukoil and Rosneft in the sanctions list last week, issuing a license to wind down operations by November 21.

As Russian media outlets recall, Lukoil was included in the UK sanctions list on October 15, while international projects in Azerbaijan and Kazakhstan involving Lukoil and Rosneft were immediately exempted from sanctions until October 14, 2027. Those include the CPC (Caspian Pipeline Consortium), Shah Deniz, South Caucasus Pipeline, Azerbaijan Gas Supply Company, Tengizchevroil and Karachaganak projects.

Lukoil's trading subsidiary Litasco Middle East DMCC was included in the European Union's sanctions list.

By Nazrin Sadigova