Lukoil to sell overseas assets after US sanctions tighten grip on Russia’s oil industry
Moscow-based oil giant Lukoil announced on Monday that it will start selling its international assets following the sanctions imposed by the United States.
Russia’s second largest oil producer, Lukoil, also said that it has started to evaluate offers from potential buyers. Asset sales will be carried out under the liquidation license issued by the US OFAC (Office of Foreign Assets Control).
According to Lukoil, this move is a direct response to “the imposition of restrictive measures by some states against the Company and its subsidiaries.” MOMENT reported.
The United States imposed sanctions on Russian oil companies on October 22, specifically targeting Rosneft and Lukoil, two of Russia’s largest oil producers. This decision was the first major measure taken against Russia since US President Donald Trump returned to office.
Deadline to terminate work
OFAC gave Lukoil until November 21 to cease its operations abroad or face “severe penalties.”
The company said it was prepared to apply for an extension of the license to ensure “uninterrupted operations of its international assets.”
US President Donald Trump imposed sanctions on Lukoil along with oil and gas company Rosneft, saying this was “a result of Russia’s lack of serious commitment to a peace process that would end the war in Ukraine.”
Washington also gave all firms working with sanctioned Russian entities a month to cut ties or face secondary sanctions, including blocking access to U.S. banks, traders, shippers and insurance companies. MOMENT reported.
Why were sanctions imposed on the USA?
The US Treasury Department said it was aimed at “increasing pressure on Russia’s energy sector and reducing the Kremlin’s ability to raise revenue for its war machine and support its flagging economy.”
In the statement made by the US Treasury, “The United States will continue to advocate for a peaceful resolution of the war, and a lasting peace depends entirely on Russia’s willingness to negotiate in good faith. The Treasury will continue to use its powers to support the peace process.”
US Treasury Secretary Scott Bessent said “now is the time to stop the killings” and called for an “immediate ceasefire”.
“Given President Putin’s refusal to end this senseless war, Treasury is imposing sanctions on Russia’s two largest oil companies that fund the Kremlin’s war machine. Treasury stands ready to take further action if necessary to support President Trump’s efforts to end yet another war. We encourage our allies to join us and comply with these sanctions.”
Oil giant Lukoil is involved in the exploration, production, refining, marketing and distribution of oil and gas in Russia and worldwide.
Company’s subsidiaries
The US Treasury Department also imposed sanctions on several Russia-based Lukoil subsidiaries under EO 14024 for operating in the energy sector of the Russian Federation’s economy. Subsidiaries include:
— Limited Liability Company Lukoil Perm: Involved in geological exploration and oil and gas production in Russia.
— Lukoil West Siberia Limited: Involved in oil and gas production in Russia.
— Lukoil Kaliningradmorneft: The company develops onshore and offshore oil and gas fields in Russia and is involved in oil and gas production in Russia.
— Lukoil subsidiary Russian Innovation Fuel and Energy: Involved in the development, production, testing and application of new technologies, techniques and equipment for the development of hydrocarbon reserves and increasing oil recovery in Russia.
— Lukoil’s subsidiary Uraloil: The company develops oil and gas fields in Russia.
