US private equity group Carlyle is examining a possible purchase of the foreign assets of Russian oil major Lukoil, after Washington imposed sanctions on the company and blocked an earlier sale to Swiss trader Gunvor.
According to three people familiar with the matter, Carlyle is at an early stage of assessing the portfolio and is considering applying for a US government licence that would allow it to negotiate and carry out due diligence on the assets. The firm has informed Lukoil of its interest, but may still decide not to proceed.
Lukoil has said it is seeking buyers for its international holdings following US and UK sanctions announced on 22 October against Lukoil and fellow Russian oil major Rosneft, the first Russia-related sanctions of Donald Trump’s second term in office. The measures target the companies and their majority-owned subsidiaries and give counterparties until 21 November to wind down business with them under a general licence issued by the US Treasury’s Office of Foreign Assets Control (OFAC).
The portfolio Carlyle is reviewing comprises Lukoil’s overseas refineries, oil and gas fields and fuel retail networks. Lukoil accounts for about 2 per cent of global oil output, with its international operations alone producing roughly 0.5 per cent, and the foreign assets have been valued at about $22 billion on the basis of 2024 filings. They include refineries in Bulgaria and Romania, stakes in oil and gas projects in Iraq, Kazakhstan, Uzbekistan, Azerbaijan and Mexico, and hundreds of filling stations in Europe, Turkey and the United States.
US sanctions and the collapse of the Gunvor transaction have already disrupted parts of this network. In Iraq, Lukoil has declared force majeure at the giant West Qurna-2 oilfield after payments were halted in the wake of the new restrictions. In Finland, its Teboil distribution business has faced fuel shortages, while in several EU member states governments are moving to prevent supplies being interrupted when the US wind-down period expires.
The proposed sale to Gunvor, announced shortly after the sanctions package, would have transferred Lukoil’s international assets to the Geneva-based trader. That deal was valued at about $22 billion, excluding debt, but was abandoned earlier this month after the US Treasury signalled it would not grant a licence. In a public statement, Washington described Gunvor as a “Kremlin’s puppet” and said no approval would be forthcoming while Russia’s full-scale invasion of Ukraine continues. Gunvor has rejected that characterisation and said it has long since exited Russian ownership.
The failure of the Gunvor transaction has forced Lukoil to seek other potential buyers that would be acceptable to US authorities before the 21 November deadline, or risk seeing assets frozen or taken over by host states. Reuters has reported interest from a range of companies and investors in individual assets, as governments and firms assess how to maintain local supply while complying with sanctions.
In Bulgaria, lawmakers voted on Thursday to overturn a presidential veto and approve legislation that allows the government to place the Neftochim Burgas refinery – the largest in the Balkans and owned by Lukoil – under the control of a state-appointed commercial manager, with the power to sell it if necessary. Sofia has presented the measure as a way to protect national fuel security and ensure the refinery does not fall foul of US sanctions once they take full effect.
Romania is moving in a similar direction. Energy minister Bogdan Ivan has said Bucharest must take control of Lukoil’s local subsidiary, which operates the Petrotel refinery and a network of around 320 filling stations, in order to safeguard supplies and enforce the US measures. He has indicated that Romania will not seek an extension of the sanctions deadline and is drafting legislation to allow a temporary state role in the assets while maintaining compliance. President Nicușor Dan has also spoken of the option of temporary state control and has said that companies with links to Russia will not be allowed to acquire the assets.
Lukoil itself has requested an extension of the US grace period, arguing that more time is needed to unwind existing contracts and evaluate offers for its international portfolio. The company has warned that sanctions are causing “growing disruptions” to its operations abroad and has indicated that asset disposals, whether to private buyers or to host governments, are central to its response.
For Carlyle, any bid would require a specific OFAC licence and close scrutiny from US authorities, given the political context of the sanctions and the scale of Lukoil’s global footprint. Carlyle currently manages about $474 billion in assets and is one of the largest private equity and alternative asset managers worldwide. Whether it proceeds could depend on the conditions attached to any licence, the reaction of host governments in Europe and beyond, and the broader trajectory of US and EU sanctions policy on Russia’s energy sector.
