Overview
U.S. private equity firm Carlyle has initiated exploratory talks with several investors in the United Arab Emirates about the possibility of bringing partners into a potential purchase of Lukoil’s international portfolio, three sources familiar with the matter said. The discussions follow a preliminary agreement announced between Carlyle and Lukoil that would transfer a wide-ranging set of overseas assets to the U.S. firm if it secures the necessary approvals.
Scope of the proposed transfer
The assets referenced in the initial agreement include oilfields in Iraq and refineries located in eastern Europe. The preliminary arrangement does not encompass Lukoil’s Kazakh holdings, and the parties have not settled on a final valuation, a separate source said. One source estimated the asset package at around $20 billion, though that figure has not been confirmed by the companies involved.
Potential UAE partners
The three sources identified state-controlled Abu Dhabi investors - Mubadala, XRG and IHC - as having held talks with Carlyle about taking stakes in the portfolio if Carlyle completes the transaction. At this stage no binding agreements have been reached. A separate source highlighted interest among the UAE parties specifically in Lukoil’s trading unit, Litasco.
Transaction mechanics and timing
It remains unclear when, or if, Carlyle would bring in outside partners should the purchase advance. One source said Carlyle plans to retain the portfolio intact. Industry practice for private equity energy transactions typically involves holding acquired assets for roughly five years before seeking to realize a return through a sale, a timeline noted by market participants but not specified as binding for this deal.
Regulatory and procedural constraints
Carlyle has indicated it still needs to complete due diligence on the Lukoil assets. Any deal would be structured to comply with the requirements of the Office of Foreign Assets Control (OFAC), the U.S. sanctions authority. OFAC guidance indicates proceeds from any sale of sanctioned assets must be placed in an account under U.S. jurisdiction and would remain frozen until any sanctions are lifted.
The U.S. Treasury has set a deadline of February 28 for Lukoil to divest its global portfolio, a timetable that has attracted interest from multiple potential bidders. Lukoil has said it remains engaged in discussions with other prospective buyers.
Public statements and responses
Requests for comment to Lukoil, Mubadala and XRG were not answered. Carlyle declined to comment on the reported discussions. IHC stated it would disclose any material developments in accordance with applicable market regulations and make announcements as required. Beyond those statements, there were no further public disclosures from the parties cited.
Note: This article reports only the information available from the involved parties and named sources. Timing, valuation and partner participation remain subject to confirmation and regulatory approvals.