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From Egypt to Kazakhstan buyers express interest in assets

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Lukoil has until November 21 to complete any transaction

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US could freeze funds from sales

By Shariq Khan, Isaac Anyaogu and Anna Hirtenstein

Nov 12 (Reuters) - From Egypt to Kazakhstan, the foreign

assets of Russian oil major Lukoil are attracting potential

bidders as time runs out to clear deals before U.S. authorities

enforce sanctions.

The U.S. has hit Lukoil with sanctions as part of its effort

to bring the Kremlin to peace talks over Ukraine, and has

already blocked Lukoil's attempt to sell foreign assets to

trader Gunvor ahead of the November 21 sanctions deadline.

The sanctions have also already disrupted Lukoil's

operations in Iraq, at pump stations in Finland and a refinery

in Bulgaria.

As its empire creaks, governments and partners are hoping to

snap up its foreign assets on the cheap. Lukoil didn't reply to

requests for comment.

BIDDERS CIRCLE

Kazakhstan's state firm KazMunayGas is studying a bid for

Lukoil's assets in the country, said two sources familiar with

the matter.

Lukoil has a stake in Karachaganak, one of the world's

largest gas and condensate fields, with Eni, Shell

, Chevron ( CVX ) and KazMunayGas.

Any new partnership will be decided by the project's

participants, taking into account the sanctions, Kazakhstan's

energy ministry said in a statement.

Shell is interested in Lukoil's deepwater blocks in Ghana

and Nigeria, two other sources said. Shell declined to comment.

In Egypt, Lukoil has indicated to the government its

possible plans to sell out, a fifth source familiar with the

situation said. Lukoil holds three concessions in Egypt. Egypt's

petroleum ministry didn't respond to a request for comment.

The government of Moldova has started talks to nationalise

Lukoil's infrastructure at Chisinau airport, the airport's

director Serdgiu Spoiala said on Tuesday.

Bulgaria is preparing to seize Lukoil's Burgas refinery.

Azerbaijan's state firm Socar and Cengiz Holding of Turkey

jointly bid for the refinery before the sanctions.

Cengiz aims to proceed with the deal, Turkish media reported

this week. Cengiz didn't immediately respond to a request for

comment.

LUKOIL'S OPTIONS

Lukoil faces difficult choices, said Sergey Vakulenko, a

senior fellow at the Carnegie Russia Eurasia Center and former

head of strategy at Russian oil firm Gazprom Neft.

If the company sells its assets, the proceeds could be

frozen by the U.S. Treasury, he said.

But delaying action would likely mean state takeovers of

some assets or their freezing, said Vakulenko, and Igor Yushkov

from the Financial University of the Russian government.

"There's really no point for Lukoil to rush," said Yushkov.

"If some assets are frozen, they're frozen. Just wait until the

conflict in Ukraine ends, and then maybe sanctions will be

eased. That's the lesser evil, probably."

Lukoil may try to emulate the strategy of Russian oil firm

Rosneft, which saw Germany put its three refineries under a

trusteeship in 2022. The plants are now controlled by Berlin but

Rosneft still owns them.

"Either you sell it yourself and hope you'll get the

proceeds, or you try to retain ownership," Vakulenko said.