Media: Lukoil ready to sell foreign assets at large discount Details

The discount on the sale of Lukoil’s foreign assets could reach up to 70 percent.

According to Izvestia, the company recently announced its intention to sell its foreign subsidiaries.

Experts believe that collectively, these assets could be valued at $10 billion, but in reality, the company may receive only a third of the market price — $3 billion — as the time limit for the sale, set until November 21, and sanction pressures will favour a discount.

Yury Stankevich, Deputy Chairman of the State Duma Committee on Energy, told the publication that Lukoil’s decision to sell its foreign subsidiaries is explained by the company’s intention to “hedge risks for the Russian oil industry” and restructure its business processes amid geopolitical tensions.

Meanwhile, Tamara Safonova, Director of the Independent Analytical Agency for the Oil and Gas Sector (NAANS-Media LLC), emphasised that Lukoil can be considered Russia’s most integrated company in the global oil and gas industry.

Dmitry Kasatkin, Managing Partner at Kasatkin Consulting, believes that with the foreign assets valued at $10 billion, Lukoil’s subsidiaries are likely to be sold for only a third of that price under current conditions.

“We can preliminarily speak of a discount of up to 70% in unfriendly jurisdictions and up to 50% in neutral and friendly ones,” he noted.

According to experts, the most favourable scenario would be the involvement of Middle Eastern investment funds, but this is more likely for assets outside the EU and US.

Currently, Lukoil owns three refineries in Europe, a network of gas stations in 20 countries, oil production facilities in Austria and Finland, participates in the development of fields in Azerbaijan, Kazakhstan, and Uzbekistan, is involved in projects in Egypt, Cameroon, Nigeria, Ghana, and other countries, has a presence in Mexican oil fields, and is one of the largest shareholders in the Caspian Pipeline Consortium (CPC).

By Vugar Khalilov