Kazakh KazMunayGas keeps Lukoil deal on hold pending sanctions exemptions

The potential acquisition by KazMunayGas (KMG) of Lukoil’s stake in their joint projects will depend on whether the companies receive sanctions exemptions, Askhat Khassenov, Chairman of the Management Board of KMG, said during an interview with journalists on the sidelines of the ADIPEC energy conference.

“Such definitive statements cannot be made today, because everything depends primarily on the permissions that will be issued — whether we will have any restrictions on financial instruments,” Khassenov said, responding to a question on whether KMG intends to buy out Lukoil’s share in the joint ventures, Caliber.Az reports, citing Russian media.

Khassenov noted that the projects in question remain in the development phase, have yet to generate financial returns, and still require significant investment.

When asked whether these ventures are included in Lukoil’s deal with Gunvor, the KMG head declined to comment.

Earlier, Lukoil confirmed it had received an offer from Gunvor Group to acquire Lukoil International GmbH, a subsidiary that holds the company’s foreign assets. Lukoil stated that it had already agreed on the key terms of the transaction and had committed not to engage with other potential buyers.

The developments come amid a new wave of Western sanctions targeting the Russian oil major. On October 22, the US Department of the Treasury imposed restrictions on Lukoil and all subsidiaries in which it holds a majority stake of more than 50%. All transactions with these entities must be completed by November 21.

Meanwhile, the European Union, as part of its 19th sanctions package published on October 23, imposed additional measures against Litasco Middle East DMCC, Lukoil’s trading arm headquartered in Dubai.

By Vafa Guliyeva