U.S. Slows Lukoil Asset Sale Amid Ukraine Peace Talks

Alanbatnews -

Washington has slowed the sale of Russian oil giant Lukoil's international assets, potentially leveraging the deal in ongoing peace negotiations concerning Ukraine, according to sources familiar with the matter.

The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) is expected to extend the deadline for finalizing deals from February 28 to April 1, as indicated by a document seen by Reuters. This marks the fourth extension granted to prospective buyers.

While U.S., Russian, and Ukrainian government officials have engaged in discussions in Geneva, Abu Dhabi, and Miami in recent weeks, progress toward a peace agreement in Ukraine has been limited. These talks have touched upon U.S. sanctions targeting Rosneft, Russia's largest oil producer, and Lukoil, the country's second-largest, sources with knowledge of the meetings revealed.

The next round of discussions between the U.S., Russia, and Ukraine is scheduled for March.

Since Washington imposed sanctions on the two Russian oil companies in October, OFAC has already extended the deadline three times for potential buyers to negotiate with Lukoil regarding assets estimated to be worth $22 billion.

A U.S. official stated that the Treasury Department extended the deadline to "facilitate ongoing negotiations with Lukoil and reach an agreement that supports efforts to deprive Russia of the revenue it needs to support its war machine and achieve peace."

Any agreement would stipulate that Lukoil receives no upfront value, with all sale proceeds deposited into a frozen account under U.S. jurisdiction, according to the official.

The sanctions have compelled Lukoil to divest its international portfolio, encompassing oil fields, refineries, and gas stations spanning from Iraq to Finland. The sale has attracted interest from over a dozen companies, ranging from U.S. oil giant Exxon Mobil to the former owner of a major website.

Originally handled solely by OFAC, the asset sale process has recently expanded to include senior officials at the White House, Treasury Department, and State Department, with Treasury Secretary Scott P. actively involved, according to sources.