FT: Lukoil risks losing assets worth €14 billion due to Trump's sanctions
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After the United States blocked the sale of foreign assets to Gunvor, the Russian oil giant Lukoil risks losing property worth about 14 billion euros. This was reported by Financial Times .

Last week, Washington blocked the deal between Lukoil and Gunvor after imposing new sanctions on the Russian oil company. The US said it would not issue a license to Gunvor for asset management because it is considered a Kremlin puppet.

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Lukoil, which is rumored to have close ties to Russian dictator Vladimir Putin, has until November 21 to sell or write off its international assets. Western companies rush to meet US deadline to cut ties with Russia.

One of the Russian oil market insiders noted that some of the original bidders who were rejected in favor of Gunvor may try to return to the negotiations. However, Lukoil's owners are preparing for possible confiscation of assets by the countries where they are registered.

The blocking of the US deal with Gunvor, which denies any ties to Russia, has made Lukoil's prospects uncertain. After completing its international expansion, the company faces limited growth potential in the domestic market, which is dominated by Rosneft and Gazprom Neft.

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"Rosneft and Gazprom Neft have given everything inside the country, and it is no longer possible to go abroad. Lukoil has no future in business. It is a company with clipped wings," said Vladimir Milov, who served as Russia's Deputy Energy Minister in the early 2000s.

There are rumors that Rosneft may try to take over Lukoil, the British newspaper writes. Representatives of the Russian energy sector claim that Putin has blocked repeated attempts by Rosneft CEO Igor Sechin to take over his rival. However, some sources believe that Rosneft may now have a chance.

A former Rosneft employee said that Sechin has never abandoned the idea of taking over Lukoil and regularly offers new options to the company's management. However, so far these proposals have not been implemented.

Representatives of Lukoil, Rosneft, Sechin, and Vagit Alekperov, Lukoil's largest shareholder, did not respond to requests for comment.

Lukoil was founded a few weeks before the collapse of the Soviet Union in 1991, when the government merged several oil producers and refineries into the country's first vertically integrated group. The architect of this deal was Vagit Alekperov, then Deputy Minister of Oil and Gas, who soon became the head of Lukoil - a "red director" as Soviet-era executives who retained their positions were called.

As the wave of privatization in Russia began, Alekperov gradually increased his stake. Although he stepped down as CEO in May 2022 following the imposition of US sanctions, Alekperov remains Lukoil's largest shareholder and is ranked among Russia's richest people by Forbes.

Rosneft's foray into the Russian oil market in the early 2000s, when the company bought up one asset after another, prompted Lukoil to focus on foreign expansion. In addition to the stakes it bought in the mid-1990s in an oil project in Kazakhstan and a gas field in Azerbaijan, Lukoil has built a global portfolio that includes oil fields in Iraq exploration and production projects in Africa, and refineries throughout Europe.

Although formally private, the company has never been independent in the sense that Western listed companies are. In a 1996 interview, Alekperov admitted that "it would be naive to deny our special relationship with the state.".

According to the Financial Times, the €14 billion figure reflects the minimum value of Lukoil's foreign assets. This estimate is based on documents submitted by its international unit in Austria and subsidiaries in the Netherlands.

The loss of these assets will be a serious blow to the Russian oil giant, which has been under Western sanctions since the first year of Russia's invasion of Ukraine. New US sanctions do not affect the company's minority stakes abroad, which are worth about 6 billion euros.

Despite the fact that US sanctions have affected both the private company Lukoil and the state-owned Rosneft, Lukoil will suffer more: its foreign assets make up a significant share of its total assets.