Saudi Arabia’s Midad Energy has emerged as one of the leading contenders to acquire LUKOIL’s foreign assets. According to Reuters, the Saudi company has proposed a transaction structure combining cash payments with escrow arrangements, while the United States has extended a sanctions waiver for the Russian energy firm until January 17. Under the proposed framework, Midad Energy would purchase the assets in cash, with the funds placed in a special escrow account until sanctions on LUKOIL are lifted. U.S. companies may also participate in the deal, Reuters reported.
The assets under consideration are estimated to be worth about $22 billion and include oil fields, refineries, and thousands of gas stations worldwide. Roughly a dozen investors have reportedly expressed interest, among them U.S. oil majors Exxon Mobil and Chevron, as well as private equity firm Carlyle.
Midad Energy is part of the Midad Holding Group, a subsidiary of Al Fozan Holding, which is based in Al Khobar. The company is pursuing an ambitious international expansion strategy, underscored by a $5.4 billion agreement with Algeria signed in October. Midad Energy CEO Abdulelah Al-Aiban is the brother of Saudi national security adviser Musa’ed Al-Aiban, who participated in U.S.-Russia peace talks hosted in Saudi Arabia in February. Their father, Mohamed Al-Aiban, served as the kingdom’s first intelligence chief.
Source: srpcdigital
The prospect of U.S. participation in the deal appears plausible given the depth of cooperation between Washington and Riyadh. This year alone, the two countries signed a series of agreements in the defense, energy, and technology sectors, under which Saudi Arabia pledged investments of up to $1 trillion.
Politico reported that earlier this week the U.S. Treasury rejected a proposal from American investment bank Xtellus to acquire LUKOIL’s foreign assets through a non-cash arrangement that would have involved swapping LUKOIL securities held by U.S. investors for the company’s global assets. The proposal was reportedly lobbied by Brian Lanza, a former adviser to Donald Trump. According to Politico, Lanza also played a role in securing the extension of the U.S. license allowing the sale of LUKOIL’s foreign assets until January 17.
Interest in LUKOIL’s assets has been broad. Carlyle, Chevron, Exxon Mobil, Hungary’s MOL, and former Pornhub owner Bernd Bergmair have previously been named among potential bidders.
LUKOIL began searching for buyers in October after being placed on U.S. and UK sanctions lists. The sale process has been complicated by sanctions imposed by the U.S. Office of Foreign Assets Control (OFAC), which could result in proceeds being frozen. As a result, LUKOIL has been exploring mechanisms to access the funds. Analysts say the transactions could take months to finalize due to legal and regulatory complexities. The assets on offer include, in Europe, the LUKOIL Neftochim Burgas refinery in Bulgaria and the LUKOIL Bulgaria network of gas stations; in the Middle East, stakes in projects in Iraq, including the West Qurna-2 field, in which LUKOIL holds a 75 percent interest; as well as assets in Egypt, Cameroon, Nigeria, Ghana, Mexico, the United Arab Emirates, and Congo.
Source: Reuters
Initially, the United States set a deadline of November 21, 2025, for LUKOIL to complete transactions it had already planned to pursue. That deadline has now been extended to January 17, amid reports of potential U.S. involvement in the deal. Analysts also suggest that LUKOIL could benefit from the participation of Saudi Arabia, given Riyadh’s close partnership with Washington.
Earlier, Swiss commodities trader Gunvor had been expected to finalize a transaction, but the United States declined to grant the company a license, publicly describing it as a “Kremlin puppet.” Gunvor subsequently withdrew its $22 billion bid. One of the factors behind the decision was the involvement of Russian businessman Gennady Timchenko, a co-founder of Gunvor who sold his stake in the firm in 2014 and is now subject to Western sanctions.
According to FINAM, the uncertainty surrounding LUKOIL’s efforts to navigate sanctions is raising questions not only about the company’s broader strategy, but also about the scale of its future dividend payments - an issue that could significantly affect investor sentiment. For Gunvor, a deal with LUKOIL would have offered substantial upside: acquiring the Russian company’s international assets would have propelled the trader into the top tier of oil producers, with its refining capacity nearly quadrupling. Ultimately, however, the transaction did not materialize.
In November, Forbes reported, citing sources, that the U.S. Treasury would not allow LUKOIL to access the proceeds from the sale of its foreign assets even if a buyer were found. Instead, the funds would remain frozen until all sanctions against the company are lifted. At the same time, delaying the sale is not a viable option: the waiver permitting LUKOIL to seek a buyer could be revoked if authorities determine that the company is not actively engaged in negotiations.
Source: Bloomberg
Bloomberg reports that LUKOIL would prefer to sell its foreign assets as a single package, although some prospective buyers are interested only in specific holdings. According to sources cited by Bloomberg, ADNOC is seeking to acquire gas fields in Uzbekistan, while Exxon Mobil and Chevron are considering the purchase of LUKOIL’s stake in West Qurna-2 in Iraq, one of the world’s largest oil fields.
Rosneft has also previously been linked to potential plans involving LUKOIL. Rumors of a possible takeover of Vagit Alekperov’s company by the state-controlled oil giant surfaced repeatedly, particularly in 2024-2025, when sanctions complicated LUKOIL’s overseas operations and created what some described as a “window of opportunity” for Rosneft. While representatives of both companies publicly denied that negotiations were underway, sources cited by The Wall Street Journal and The Financial Times pointed to Rosneft’s interest in consolidating major oil assets. Ultimately, the deal did not materialize, reportedly after being blocked by the Kremlin.
Now, the future of LUKOIL’s foreign assets appears to rest largely in Saudi hands. Analysts say a deal involving Saudi investors could offer Moscow a way out of an increasingly complex and constrained situation.
By Tural Heybatov
