Russia’s second-largest oil producer, Lukoil, announced on Monday that it plans to sell its international assets after shock sanctions imposed last week by US President Donald Trump.
The Moscow-based energy giant said in a statement on its website that it had commenced the search for buyers for its foreign ventures, clarifying that it had reached the decision “owing to introduction of restrictive measures against the Company and its subsidiaries by some states.”
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“The consideration of bids from potential purchasers has been started,” the company added.
A former Lukoil executive speaking to Politico said that the sale could slash the company’s revenues and profits by “about 30 percent.”
It may be forced to put three refineries and around half of its roughly 5,000 petrol stations worldwide on the market, the executive told the outlet, concluding that “Lukoil is finished.”
The company did not specify which assets are on the block.
The development followed the announcement of a surprise package of sanctions on Lukoil and state-backed Rosneft by Trump, who said on Wednesday that “it was time” to implement penalties on Russia for its reluctance to reach a peace deal in Ukraine.
The US Office of Foreign Assets Control set a Nov. 21 deadline for Lukoil to wind down its foreign operations or face substantial penalties.
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Lukoil expressed its intention to comply and added that “if necessary the company plans to apply for an extension of the license to ensure uninterrupted operations of its international assets.”
Washington has given companies that engage with the sanctioned Russian oil giants a one-month deadline to sever ties or risk being hit with secondary sanctions, effectively cutting off acess to US banks, traders, shippers and insurers.
Together, Rosneft and Lukoil are responsible for roughly two thirds of the 4.4 million barrels of crude Russia experts every day. Lukoil supplies oil to Hungary and Slovakia.
It also maintains stakes in oil terminals and retail fuel chains in Europe while pursuing a portfolio of upstream and downstream projects in Central Asia, including Kazakhstan, and in Africa and Latin America, according to Reuters.
Russian President Vladimir Putin said previously that the sanctions imposed by the US were “serious” but would “not significantly impact” Russia’s economy.
It came after the country’s Foreign Ministry claimed that Russia had developed a “strong immunity” to sanctions, adding they would only negatively impact the peace process.
Last week, a report by Bloomberg suggested that major Indian refineries would see Russian oil deliveries drop to near zero after US sanctions on Rosneft and Lukoil.
On Oct. 15, the UK targeted the same two oil giants in a fresh round of sanctions hitting companies accused of helping Moscow to circumvent international restrictions.
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