Reuters: Lukoil appeals to US Treasury after sanctions imposed

Russian oil company Lukoil has submitted a request to the US Department of the Treasury following the sanctions imposed against it.

Three sources confirmed to Reuters that Lukoil has asked the US Treasury to extend the deadline for winding down operations after the sanctions were introduced, Caliber.Az reports.

They explained that Lukoil is seeking more time because the company needs additional flexibility to meet its existing obligations and to review proposals regarding its assets.

On October 23, the US Treasury imposed sanctions on Lukoil, with restrictions covering all entities under its control.

The company was given one month, until November 21, to wind down its operations.

Meanwhile, the blocked sale of Lukoil’s foreign business to the commodity trader Gunvor has sharply worsened the company’s situation.

According to the Financial Times, Washington refused to grant a licence for the deal, calling Gunvor “a Kremlin puppet,” leaving Lukoil at risk of losing foreign assets worth at least €14 billion.

Industry insiders told the newspaper that Lukoil’s owners now fear some host countries may simply seize these subsidiaries if a sale cannot be completed before the US deadline.

The failure of the transaction has also revived speculation that Rosneft may attempt once again to take over Lukoil, although previous efforts by Igor Sechin were blocked by President Vladimir Putin.

Analysts note that with international expansion no longer possible, and Russia’s domestic market dominated by Rosneft and Gazprom Neft, Lukoil’s long-term business prospects have severely narrowed.

By Jeyhun Aghazada