Lukoil has signed a preliminary, non-exclusive agreement to sell its subsidiary, Lukoil International, to the US investment firm Carlyle Group. This sale is contingent upon obtaining necessary regulatory approvals, including permission from the US Treasury Department's Office of Foreign Assets Control (OFAC).

Context and Previous Attempt

This move represents Lukoil's second attempt to divest its international upstream and downstream assets following US sanctions imposed in October due to the war in Ukraine. An earlier agreement to sell these assets to commodity trader Gunvor was blocked by the US Treasury in November. The US had extended a deadline for potential buyers to negotiate with Lukoil until February 28.

Asset Valuation and Scope

Analysts estimate the value of Lukoil's international assets between $10 billion and $22 billion. The subsidiary in question, Austrian-registered Lukoil International, holds the group's foreign assets. However, the transaction with Carlyle specifically excludes Lukoil's assets in Kazakhstan, which the company will retain and continue to operate.

Ongoing Negotiations and Exceptions

Lukoil continues to negotiate with other potential buyers for its foreign assets. Separately, the US Treasury has granted long-term sanctions exceptions for Lukoil's equity stakes in key Kazakh oil projects (Tengiz and Karachaganak) and the Caspian Pipeline Consortium. The Kazakh government has applied to OFAC for permission to discuss purchasing Lukoil's holdings in the country.

Other Asset Agreements

Beyond the Carlyle deal, Lukoil has an agreement with Mexico’s Grupo Carso to transfer its operating stakes in two offshore oil developments in the Gulf of Mexico.