Chevron and Quantum Capital Group are reportedly preparing a bid for the $22 billion international operations of Lukoil, which is under sanctions
According to the Financial Times, two major US firms, Chevron and Quantum Capital Group, are preparing a bid to acquire the international portfolio of sanctioned Russian oil giant Lukoil, with the Trump administration indicating its support.
Sanctions were placed on Russia’s second-largest oil producer by Washington last October as part of a wider strategy to pressure Moscow regarding the Ukraine conflict, compelling Lukoil to sell off its overseas assets valued at $22 billion. Because of the sanctions, any deal must obtain a specific license from the Treasury Department to move forward; the authorization for negotiations has been prolonged until January 17.
The FT reported on Wednesday that Chevron and Quantum intend to bid for Lukoil’s entire portfolio of international assets. This portfolio encompasses three refineries in Europe, interests in oil and gas fields in nations like Iraq, Kazakhstan, several African countries, and Mexico, as well as a global retail network of more than 2,000 fuel stations.
A senior US official expressed approval of the Quantum-Chevron proposal to the FT, stating, “We are looking for a divestment that places ownership of these assets into the hands of an American owner and operator ad infinitum.”
Other entities said to be interested in the assets are ExxonMobil, the Hungarian company MOL, the Emirati International Holding Company, private equity firm Carlyle, and Saudi Arabia’s Midad Energy. A prior offer from Swiss-based trader Gunvor Group fell apart in November after the US Treasury alleged the firm had connections to the Kremlin.
Moscow has repeatedly denounced Western sanctions as illegal and politically driven, cautioning that they will have negative consequences. After the Gunvor deal collapsed, Kremlin spokesman Dmitry Peskov stated that the Lukoil situation demonstrated that the “illegal trade restrictions” enacted by the US are “unacceptable and hurt international trade.”
Chevron has been engaged in a legal and public relations conflict for decades, mainly concerning extensive environmental damage from Texaco’s past operations in the Ecuadorian Amazon, which led to a disputed $9.5 billion judgment against the company in 2011. The firm also encounters wider criticism over its environmental track record, including claims of greenwashing and operational incidents around the world.