US sanctions threaten to disrupt Lukoil's international assets

The sale of Lukoil's overseas assets to Swiss commodity traders Gunvor has been blocked by Washington, which is a result of U.S. sanctions.

Lukoil has a global footprint that includes upstream oil and natural gas projects, refineries, and fuel distribution networks in Europe, Central Asia and the Middle East.

The company produces a half-million barrels of crude oil per day, 0.5% of the global oil production, outside of Russia in countries like Iraq, Kazakhstan, and Azerbaijan.

Here are some details on its international assets.

UPSTREAM OPERATIONS

MIDDLE EST

Lukoil holds 75% of Iraq's West Qurna 2 Oilfield, which produces 480,000 barrels per day, making it one of the largest oilfields in the world.

Sources say that Lukoil declared force majeure on the field after Iraq stopped all payments in cash and crude oil to the company.

Lukoil and Egypt's Tharwa Petroleum jointly own a 50% stake each in the West Esh el Mallaha (WEEM), as well as WEEM Extension. Lukoil also owns a 24% share in the Meleiha contract, while Eni is the remaining shareholder.

It holds 10% in the UAE of Ghasha, an offshore gas and condensate concession operated by ADNOC.

CENTRAL ASIA

Lukoil has stakes in several major Kazakh projects including Karachaganak, where it holds 13.5% of the shares and Tengiz, which is 5%. It has a 12.5% share in the Caspian Pipeline Consortium, which exports oil to the Black Sea from Tengiz.

The company owns a further 20% of BP's Shah Deniz field, located in the Azerbaijani part of the Caspian Sea.

Lukoil operates the South-West Gissar field in Uzbekistan, and has a 90% share in the Kandym development fields near the Turkmenistan border.

AFRICA AND LATIN AMERICA

Lukoil holds upstream interests, such as in Cameroon and Nigeria, and in Ghana. It also has a 25% stake in the Marine XII LNG block in Congo, which is operated Eni.

Lukoil has stakes with Eni in Mexico, where they are partners. It has a 50% share in the Amatitlan offshore block operated by Petrolera de Amatitlan SAPI de CV.

REFINING ASSETS

BULGARIA

Lukoil is the owner of the largest refinery in the Balkans, Neftohim Burgas, which produces 190,000 barrels per day. Bulgaria's Parliament recently passed legislation that allows the government to control the refinery in response to the sanction, citing concerns about national security. The site was also made more secure in preparation for a possible takeover.

ROMANIA

Lukoil is the sole owner of Petrotel, a refinery in Romania that produces 48.600 barrels per day. The Romanian government said that it would scrutinise any proposed asset sale to ensure compliance with EU regulation and to safeguard energy safety.

Netherlands

Lukoil’s trading arm Litasco owns a 45% share in the Zeeland Refinery, which is a joint-venture facility that produces 180,000 barrels per day.

Fuel Retail Business

FINLAND

Lukoil owns Teboil in its entirety, which is one of Finland's biggest fuel retailers. It has approximately 430 petrol stations. Helsingin Sanomat reports that some Teboil fuel stations are running low on fuel because of the halted delivery due to sanctions.

MOLDOVA

Lukoil is the owner of the only fueling station and the only storage facility at the country's sole international airport, Chisinau. Washington has granted a temporary waiver to Lukoil so that it can continue operating in Moldova.

UNITED STATES

About 200 Lukoil petrol stations are located in New Jersey and Pennsylvania. In the early 2000s, the Russian company entered the U.S. by purchasing local stations including Mobil branded stations from ConocoPhillips.

Lukoil is a major player in the retail sector of several countries. It is one the leading players in Moldova, Bulgaria and operates more than 600 petrol stations across Turkey.

(source: Reuters)