Carlyle Seeks UAE Partners for Lukoil Asset Deal

Key Developments

U.S. private equity firm Carlyle has begun exploratory talks with investors in the United Arab Emirates to form partnerships for its potential acquisition of Russian firm Lukoil’s international assets. The discussions are contingent on the preliminary agreement between Carlyle and Lukoil proceeding.

Situation Overview

The proposed deal involves a wide range of Lukoil's assets, including oilfields and refineries, excluding its Kazakh operations. While no official valuation has been disclosed, sources value the portfolio at approximately $20 billion. The transaction requires approval from the U.S. Office of Foreign Assets Control (OFAC) due to sanctions on the Russian producer.

Market Impact and Strategic Interests

State-controlled Abu Dhabi investors Mubadala, XRG, and IHC are reportedly in talks with Carlyle, with sources indicating a strong interest in Lukoil’s trading arm, Litasco. Any proceeds from the sale must be placed in a U.S.-controlled frozen account until sanctions are lifted, a key condition set by U.S. authorities.

Summary

The outcome of these negotiations remains uncertain as Carlyle completes its due diligence. The deal's progression hinges on navigating U.S. sanctions and finalizing terms before the U.S. Treasury's February 28 deadline for Lukoil to sell its global portfolio. The potential entry of UAE partners could reshape the ownership structure of these significant energy assets.

FAQ

Q: Who is Carlyle in talks with?
A: Carlyle is in exploratory discussions with UAE state-controlled investors, including Mubadala, XRG, and IHC.

Q: What is the estimated value of the Lukoil assets?
A: Unofficial sources have valued the asset portfolio at around $20 billion.

Q: Is the deal finalized?
A: No, it is a preliminary agreement that is still pending due diligence and approval from U.S. sanctions authorities.

Source: investing.com