A United States licence that allowed negotiations over the sale of Russian oil major Lukoil’s international assets expired on Saturday, potentially slowing discussions over the company’s overseas business.
The licence, issued by the US Treasury’s Office of Foreign Assets Control (OFAC), covered negotiations, due diligence and conditional agreements related to the proposed sale of Lukoil International, the Vienna-based holding company that owns the Burgas refinery in Bulgaria, the Ploiești refinery in Romania and a stake in an Iraqi oilfield.
Although the licence has expired, it does not affect fuel production or sales in Bulgaria. Those operations remain covered under a separate OFAC licence that is valid until October 29, allowing Lukoil’s Bulgarian subsidiaries to continue operating.
US sanctions have increased pressure on Lukoil to divest its international assets, but no deal has been finalized. Any completed sale will still require separate approval from Washington, provided Lukoil fully relinquishes control of the assets, the sale proceeds are placed in a blocked US account, and the company does not receive any windfall from the transaction.
US investment firm Carlyle has remained one of the leading bidders for the portfolio, which analysts estimate is worth about $22 billion. Lukoil has already written down the value of the assets by nearly $20 billion, contributing to its first annual loss.
If the licence is not renewed, any further steps in the sale process will require specific authorization from OFAC.
The proposed sale also faces legal challenges in Bulgaria. Earlier this week, the country’s Constitutional Court struck down legislation that would have allowed a government-appointed administrator to sell the Burgas refinery without judicial oversight, restoring the possibility of court challenges to any future transaction.
Meanwhile, European Union ambassadors approved the bloc’s 21st sanctions package against Russia on Thursday. However, at Bulgaria’s request, Lukoil founder Vagit Alekperov was removed from the final sanctions list alongside Russian Orthodox Patriarch Kirill.
Uncertainty also remains over crude supplies to the Burgas refinery. Earlier this year, the refinery’s government-appointed administrator said existing crude inventories could last only until the end of July. However, crude deliveries resumed from July 1 through Swiss-registered traders, although no updated estimate of current stock levels has been released.
