Lukoil May Sell Foreign Assets Piecemeal, Experts Suggest
Following Gunvor's exit from a deal, Russian oil company Lukoil is likely to sell its foreign assets in parts, primarily to existing partners, according to experts interviewed by TASS on November 7 in Moscow. The estimated fair value of these assets is around $12 billion, though a significant discount might be considered for a swift transaction.
Expert Insights on the Sale Strategy
Kirill Bakhtin, head of the Russian Equities Center at BCS World of Investments, highlights that Lukoil no longer faces urgency in the sale. He notes:
“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.”
Bakhtin points out that selling assets individually to maximize price is now more profitable and there is no need to rush the deal.
Preferred Buyers and Sale Breakdown
The simplest approach for Lukoil is to sell its foreign assets to current partners in existing projects. Stanislav Mitrakhovich, a leading expert at the National Energy Security Fund and research fellow at the Financial University, concurs:
“I think the deal can now break down into components, and the company will sell the assets separately.”
This approach reflects a strategic pivot from a single sale to a piecemeal transaction process.
Author's summary: Experts believe Lukoil will likely sell its $12 billion foreign assets piece by piece, favoring existing partners and avoiding rushed deals to secure better prices and buyer approvals.