Lukoil, a Russian oil company, says it will sell its international assets in response to Western sanctions

Lukoil - Russia's second largest oil producer - announced on Monday that it will sell its international assets in response to sanctions imposed by the United States last week over Ukraine. The sale of assets will be the biggest action taken by a Russian firm in response to Western sanctions over Russia’s war in Ukraine that began in February 2022.

The sale of assets is being conducted under an OFAC wind-down license. Lukoil stated that if necessary, the company will apply for an extension of the license in order to continue uninterrupted operations of international assets. Donald Trump, the U.S. president, imposed sanctions related to Ukraine on Russia's two largest oil companies - Lukoil & Rosneft - on October 22. On October 15, Britain targeted Lukoil, Rosneft and 44 "shadow fleet" tankers consisting mainly of old tankers owned by opaque parties, in a bid to tighten sanctions on energy and cut off Kremlin revenues.

Lukoil, headquartered in Moscow, accounts for about 2% of the global production. The name is derived from three oil-producing towns in western Siberia, Lukoil’s traditional exploration area: Langepas Urai and Kogalym.

The company has not identified specific assets that it wants to sell.

The West Qurna 2 Oil Field in Iraq, which is one of the largest oil fields in the world, is its biggest foreign asset. It holds 75% stake.

Interfax, a Russian news agency, reported that the oil field's production topped 488,000 bpd during April.

The largest refinery of the Balkans in terms of capacity, Lukoil Burgas is owned by the company. It also owns Petrotel, a Romanian oil refinery.

Lukoil provides oil to Hungary, Slovakia and Turkey's STAR Refinery, owned by Azerbaijani SOCAR. Both are heavily dependent on Russian crude.

The company has also invested in retail fuel chains and oil terminals in Europe. It has various downstream and upstream projects in Africa, Latin America, Central Asia including Kazakhstan. Reporting by Ksenia orlova; Writing by Vladimir Soldatkin and Matthew Lewis

(source: Reuters)