Copyright tass
MOSCOW, November 7. /TASS/. After Gunvor's withdrawal from the deal, Russian oil major Lukoil could now sell its foreign assets piecemeal, most easily to existing project partners, experts interviewed by TASS believe. They estimate the assets’ fair value at about $12 billion, but do not rule out the possibility of a significant discount in case of a quick deal. It will now be more profitable for Lukoil to sell its assets separately and there is no need to rush the deal, noted Kirill Bakhtin, head of the Russian Equities Center at BCS World of Investments. "Lukoil no longer has the factor of urgency - it's essentially impossible to sell any asset at an acceptable price before November 21, especially given the buyer's desire to protect itself from further risks and, in connection with it, obtain purchase approval from the US Treasury. Foreign assets have varying value and synergies for different potential buyers, so a partial sale at the highest price is possible for Lukoil," he said. According to the expert, the simplest scenario for Lukoil would be to sell the assets to its current partners in these projects. "I think the deal can now break down into components, and the company will sell the assets separately," agrees Stanislav Mitrakhovich, a leading expert at the National Energy Security Fund and a research fellow at the Financial University. According to Finam analyst Sergey Kaufman, if the US refuses to renew the license to wind down operations with the company after November 21, the risk of some of Lukoil's assets being placed under external management increases. Finam estimates the fair value of Lukoil's international projects at $12 billion. "However, finding buyers for all assets at once in a very short period of time could be quite difficult, especially given the risk that the US Treasury will block the deal again. In such a situation, if a buyer is found, the discount, in our opinion, could already be more than 50%," he noted. "Regardless of the impact of sanctions, the Russian oil company's assets are certainly attractive acquisition targets for a very wide range of buyers: oil and gas majors, oil traders, national oil and gas companies, and investment funds," Kaufman said. Mitrakhovich doesn't rule out the possibility that the company will have to agree to additional discounts. "A discount - yes, I think we'll have to offer an additional one," he noted. Bakhtin, for his part, described the asset discount situation as ambiguous, and the deal, in his opinion, could take at least several months. "On the one hand, there were no pre-agreed key terms, as in the Gunvor case, and on the other, there's no urgency for a sale. The discount issue is off the table for now—the market doesn't know what the discount would be in the Gunvor scenario," he said. According to the expert, Lukoil's main consolidated foreign assets in Bulgaria, Romania, and Iraq are valued at approximately 8% of EBITDA, but their sale, subject to the buyer's full due diligence process, could take at least several months. On October, the US and the UK added Lukoil and its subsidiaries to their sanctions lists. After that, Lukoil announced that, in connection with the introduction of restrictive measures against the company and its subsidiaries, it intended to sell its international assets. Lukoil received an offer from international oil trader Gunvor to acquire Lukoil International GmbH, which owns the Russian company's foreign assets. On November 7, Gunvor announced withdrawal of its offer to purchase Lukoil's foreign assets following the US Department of the Treasury's refusal to grant it a business license. Lukoil is implementing a large number of international projects. Through its trading subsidiary Litasco, the company owns two refineries in Europe (Petrotel Lukoil in Romania and Lukoil Neftokhim Burgas in Bulgaria), as well as a 45% stake in the Zeeland Refinery in the Netherlands. As of the end of 2024, Lukoil also operated an extensive network of gas stations in 20 countries, of which 2,456 were located abroad (including in the United States and Europe). In addition, the company operates in Azerbaijan, Kazakhstan, Uzbekistan, Iraq, the UAE, Egypt, Cameroon, Nigeria, Ghana, the Republic of Congo, and Mexico.
