Lukoil fuel tanks at its headquarters in Brussels, Belgium, 2 September 2022. Photo: EPA/STEPHANIE LECOCQ
Russian oil company Lukoil has filed a request with the US Department of the Treasury seeking a delay to the imposition of sanctions as it scrambles to find a buyer for its foreign assets and close out existing trade commitments, Reuters reported on Wednesday.
The firm, Russia’s third largest company, faces a race against time to meet the deadline that was issued by the US Treasury’s Office of Foreign Assets Control last month giving companies until 21 November to conclude any business deals with Lukoil — including the purchase of its international assets.
The sanctions on Lukoil and fellow Russian energy giant Rosneft have been designed by Washington to close one of the Kremlin’s most important sources of revenue, which it uses to finance its war machine in Ukraine.
Described as the “lifeblood” of Putin’s economy by former US State Department official Eddie Fishman, Russian energy exports had netted the Kremlin around €883 billion in the first three years of the war in Ukraine, according to a BBC report published in May.
Failing to sell in time could lead to Lukoil’s foreign assets being seized or nationalised by foreign states, Sergey Vakulenko of the Carnegie Russia Eurasia Centre told Reuters.
Nevertheless, numerous bids from both national governments as well as state and private firms to purchase local Lukoil’s overseas operations are being considered, according to The Guardian. The Bulgarian and Moldovan governments are reportedly seeking to acquire sites at Burgas and Chișinău Airport respectively, while Shell has reportedly expressed interest in Lukoil’s deepwater assets in Ghana and Nigeria.
The frantic rush to find buyers for Lukoil’s foreign assets follows the collapse of a previously agreed sale to Swiss-based commodities firm Gunvor after the US government labelled it a “puppet” of the Kremlin earlier this month.
Gunvor was co-founded by Russian oligarch Gennady Timchenko and Swedish oil trader Torbjörn Törnqvist in 2000. Despite the company issuing a public denunciation of Russia’s invasion of Ukraine and Timchenko selling his stake to Törnqvist in 2014, suspicions of Russian influence over the firm have persisted, leading the US Treasury to warn that Gunvor would “never get a licence to operate and profit” as long as Putin continued “the senseless killings” in Ukraine.
