Russian oil concern “Lukoil“ will sell its foreign assets to the Swiss company Gunvor Group Ltd. registered in Cyprus - one of the largest crude oil traders in the world. “The key terms of the deal were previously agreed upon by the parties“, the press service of “Lukoil“ announced on Thursday, October 30. It concerns the acquisition of LUKOIL International GmbH, which owns the foreign assets of the Russian concern. Negotiations with other potential buyers will not be held, the statement said. The amount of the deal was not specified.
The announcement of the deal comes after US President Donald Trump decided to impose sanctions on the two largest Russian oil companies - “Lukoil” and "Rosneft", to close another tap for financing Putin's war against Ukraine. "Lukoil"'s foreign assets include a network of gas stations in 20 countries and 3 refineries in the EU, including Burgas-based "Neftokhim" and the chain of "Lukoil" gas stations in Bulgaria.
An oligarch close to Putin is among the founders of the company buyer
"Gunvor" was founded in 2000 by Gennady Timchenko and Swedish entrepreneur Thorbjorn Turnqvist. In 2014, shortly before international sanctions over the annexation of Crimea came into effect, Timchenko sold his stake to Turnqvist to avoid the company falling under the sanctions. As the publication „Medusa" notes, the US Treasury Department does not rule out that the funds in „Gunvor" belong to Vladimir Putin.
At the end of September, the environmental organization „Greenpeace" published data from a study, according to which „Gunvor" is one of the largest buyers of Russian liquefied gas in the EU. In 2019, the company was investigated in Switzerland for bribery for access to oil markets in Africa, as a result of which the company was fined.
The deal requires approval from the US Department of Commerce, which imposed sanctions on the company and, in particular, the Office of Foreign Assets Control (OFAC), which issued the license to liquidate the assets.
The sale could collapse the company's profits
In connection with the news of the sale, the prestigious publication Politico quoted a former head of “Lukoil“, who requested anonymity, as predicting that this could be the end of the Russian oil giant. The sale of its foreign assets could reduce the group's revenue and profit by about 30 percent, as it would have to sell three oil refineries and about half of its 5,000 gas stations worldwide, he believes.
The Russian newspaper “Izvestia“ quoted industry experts as saying that the foreign subsidiaries are worth about $10 billion. However, under the pressure of sanctions, it is unlikely that more than $3 billion will be realized, according to the German publication n-tv.