Bloomberg: authorities in European countries have begun a battle for the assets of Russian Lukoil.
Authorities in European and Middle Eastern countries have started a battle for the assets of Lukoil, which has come under U.S. sanctions. This was reported by Bloomberg.
Countries are rushing to ensure the uninterrupted operation of the extensive oil fields of the Russian energy giant after the U.S. Treasury imposed sanctions against the company and prohibited the energy firm Gunvor Group from purchasing Lukoil's assets, calling it a "puppet of the Kremlin." A deadline of November 21 was set to halt current transactions with the company, which fuels interest among players.
"While there is enough supply in the global oil markets to cope with any disruptions, the situation in the refining sector is quite different," explained Richard Bronze, head of the geopolitics department at Energy Aspects Ltd and a consultant.
After the Iraqi authorities halted cash and crude oil payments, Lukoil declared force majeure at the West Qurna-2 field. The company ceased operations of foreign employees who are not Russian citizens at the field. To ensure continued production at the site, two local state companies have taken over the management of the field.
Meanwhile, the opposition in Bulgaria has demanded control over the country's largest oil refinery in Burgas, which processes 195,000 barrels per day, to ensure its operation and preserve jobs. Seven companies want to buy Lukoil's refinery in Bulgaria, but some are demanding that the facility be nationalized. In Finland, Teboil gas stations owned by Lukoil have begun to close en masse.
Against this backdrop, several countries have started pressuring the U.S. Treasury to issue a license that would allow Lukoil's assets to continue operating after November 21. The impetus is concerns about being left without refined petroleum products, as well as skyrocketing oil and diesel prices following the announcement of sanctions. However, as stated by Bob McNally, president and founder of the consulting firm Rapidan Energy Advisors LLC, the U.S. agency is unlikely to help Lukoil adapt to the sanctions unless the company threatens to cut oil production and refined product output to a level that would lead to rising global prices.
