Russian Oil Giant Lukoil to Sell Overseas Assets Amid Western Sanctions

Sale to Proceed Under U.S. Sanctions Authority License

Lukoil, a major Russian oil company that has been targeted by sanctions from the United States and Europe, has announced plans to sell its overseas assets.

Reuters Yonhap News

According to Bloomberg and other sources, Lukoil, the second-largest oil company in Russia, issued a statement on the 27th (local time) declaring its intention to proceed with the sale of its overseas assets.

This move by Lukoil is considered the most significant response by a Russian company to Western sanctions since Russia's invasion of Ukraine in February 2022. Lukoil stated that the decision to sell its overseas assets was made "due to the introduction of sanctions by several countries," and explained that "the asset sales will be carried out in accordance with a wind-down license from the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC)."

On the 22nd, President Donald Trump designated Lukoil, Rosneft, and their subsidiaries-Russia's leading oil companies-as targets of sanctions in an effort to pressure a ceasefire in the Russia-Ukraine war. The European Union and the United Kingdom have also introduced comprehensive sanctions aimed at Russian oil and gas revenues, targeting these companies as well.

The OFAC mentioned by Lukoil is an agency under the U.S. Department of the Treasury responsible for administering economic sanctions. It appears that, after the United States imposed sanctions, OFAC issued a license allowing Lukoil a certain period to wind down its operations, including asset sales.

Lukoil accounts for about 2% of global oil production, and its largest overseas asset is the West Qurna-2 oil field in Iraq, in which it holds a 75% stake. Other major assets include the Neftochim Burgas refinery in Bulgaria and the Petrotel refinery in Romania.

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