US Eases Path For Russian Oil Giant Lukoil's Foreign Asset Sales

The U.S. Treasury Department on Friday authorized potential buyers to negotiate with Russia's Lukoil (MOEX: LKOH) regarding purchases of the company's foreign assets through Dec. 13, according to licenses issued by the department.

The move comes after the U.S. imposed sanctions last month on Russia's two largest oil companies, Lukoil and Rosneft (MOEX: ROSN), in response to their role in financing Russia's war in Ukraine. Lukoil has faced growing disruptions to its foreign assets, which account for about 0.5% of global oil production, since the sanctions were imposed.

The authorization represents a limited easing of restrictions, providing companies a window to explore purchases of Russian assets while maintaining pressure on Moscow over its actions in Ukraine.

Sale Requires Complete Severance From Lukoil

The license permits negotiations and entry into contingent contracts for the sale, disposition, or transfer of Lukoil International GmbH or any entity in which LIG owns a 50% or greater interest.

The Treasury will authorize only finalized transactions through separate approval from the Office of Foreign Assets Control.

The licenses state that payments to LIG entities must be deposited into blocked accounts under the Russian Harmful Foreign Activities Sanctions Regulations.

Meanwhile, Reuters reported on Thursday that U.S. private equity firm Carlyle is exploring options to buy Lukoil’s foreign assets, according to sources familiar with the situation. Carlyle was looking to apply for a U.S. license allowing it to buy the assets before beginning due diligence, according to the report.

Global Reactions to Sanctions

The sanctions announced in October on Russia's two largest oil companies prompted Ukrainian President Volodymyr Zelenskyy to call on the U.S. to extend restrictions across the entire Russian energy sector.

In line with U.S. sanctions, the European Union also unveiled a new package targeting Russian energy, finance, and shipping sectors, including a ban on Liquefied Natural Gas (LNG) imports.

China denounced the U.S. sanctions, saying they have no legal basis under international law.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.