US sanctions: Lukoil says it will sell its international assets

Lukoil informs that owing to introduction of restrictive measures against the company and its subsidiaries by some states the company announces its intention to sell its international assets, Lukoil said on October 27.

The consideration of bids from potential purchasers has been started, it said.

The sale of the assets is conducted under OFAC wind down licence.

If necessary the company plans to apply for extension of the licence to ensure uninterrupted operations of its international assets, the statement said.

In Bulgaria, the ruling majority, citing the sanctions, pushed through Parliament legislation that will require any sale of the Lukoil refinery in the coastal city of Bourgas and other assets to first be cleared by the State Agency for National Security and the Cabinet.

In a statement on October 22, the US Treasury Department said that the action by Office of Foreign Assets Control (OFAC) targets Russia’s two largest oil companies, Open Joint Stock Company Rosneft Oil Company (Rosneft) and Lukoil OAO  (Lukoil), which are now designated.

Rosneft is a vertically integrated energy company specializing in the exploration, extraction, production, refining, transport, and sale of petroleum, natural gas, and petroleum products.

Lukoil engages in the exploration, production, refining, marketing, and distribution of oil and gas in Russia and internationally.

Rosneft and Lukoil are being designated pursuant to E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.

Additionally, OFAC is designating a number of Russia-based Rosneft and Lukoil subsidiaries.  All entities owned 50 percent or more, directly or indirectly, by Rosneft and Lukoil are blocked pursuant to E.O. 14024, even if not designated by OFAC, the Treasury Department statement said.

The European Commission (EC) is for the time being not seeing any particular issues, especially regarding security of supply, because of the sanctions by the United States on Russia’s Lukoil and Rosneft, an EC spokesperson told a regular briefing on October 27.

(Photo, of the Lukoil refinery in Bulgaria’s Bourgas: Nasomatrix, via Wikimedia Commons)