US private equity giant Carlyle has initiated exploratory talks with state-linked investors in the United Arab Emirates (UAE) to potentially partner on the acquisition of Lukoil’s international asset portfolio, currently valued at approximately $20 billion, sources familiar with the matter said to Reuters
Carlyle and Lukoil have reached a preliminary agreement for the transfer of a broad overseas subsidiary, LUKOIL International GmbH. The portfolio includes significant upstream assets, such as a 75% stake in Iraq’s West Qurna 2 oilfield, and downstream operations including refineries in Bulgaria and Romania.
The transaction follows a February 28, 2026, divestment deadline set by the US Treasury after Lukoil was placed under sanctions in late 2025.
Abu Dhabi-based entities, including Mubadala Investment Company, XRG, and International Holding Company (IHC), have reportedly held discussions regarding minority stakes in the portfolio. Sources indicate a specific interest among UAE investors in Litasco, Lukoil’s Geneva-based trading arm. While talks are ongoing, no formal agreements have been finalized.
The deal notably excludes Lukoil’s assets in Kazakhstan, which the Russian producer intends to retain under existing licenses. Carlyle’s entry into the deal aligns with typical private equity cycles, where energy assets are optimized over a five-year holding period before a strategic exit.
The completion of the deal remains contingent on rigorous due diligence and formal approval from the U.S. Treasury’s Office of Foreign Assets Control (OFAC). Carlyle has confirmed that any structured transaction will strictly comply with OFAC regulations to navigate the secondary sanctions risks associated with Russian entities.
Under current OFAC guidance, proceeds from the sale must be deposited into US-controlled accounts and will remain frozen until sanctions against Lukoil are lifted. Despite the preliminary agreement with Carlyle, Lukoil maintains that it continues to engage with other potential suitors to ensure the best outcome for its shareholders.
