Boehly-led consortium advances Lukoil overseas asset bid through securities swap

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Boehly-led Lukoil asset bid

Highlights

Boehly-led consortium advances a Lukoil overseas asset bid by swapping billions of dollars in frozen Lukoil securities from Western investors, with deal completion possible within weeks.
The initial $22 billion sale portfolio—including oilfields, refineries, and petrol stations in Europe, the Middle East, and Africa—has declined in value as some assets ceased operating.
The consortium’s bank acquires Lukoil shares from U.S. and British funds at 30 cents on the dollar, while the escrow structure aims to satisfy U.S. Treasury concerns and navigate sanctions compliance.

Swap structure and sale timeline

As first reported by Reuters, the proposed transaction centers on frozen Lukoil securities bought from Western investment funds and depositary banks, which would be exchanged for the Russian oil group's foreign assets. Three people close to the process say a bank acting for the consortium has already acquired billions of dollars of those securities, while four people say the deal could be completed within weeks.

If completed, the transaction would bring to an end a sale process that has lasted for more than a year and was initially valued at $22 billion. The portfolio includes oilfields, refineries and petrol stations in Europe, the Middle East and Africa, although two people say the value has weakened as some assets have stopped operating.

The sale process starts after U.S. sanctions are imposed on Lukoil in October 2025. Reuters reports in February that Washington slows the process in part to increase pressure on Russia in negotiations over ending the war in Ukraine.

Last December, the U.S. Treasury rejects an offer from a group that includes Xtellus Partners, saying Lukoil should not receive a windfall in shares or cash. Two people say the Boehly-led group moves ahead by proposing that the shares be placed in escrow rather than transferred directly to Lukoil.

Sanctions test and investor impact

The consortium includes Boehly, Emirati investors International Holding Company and Al Hail Holding, the Syrian-Qatari Al-Khayat brothers and the U.S. International Development Finance Corp. Representatives for Boehly, Al Hail, the Al-Khayats and the U.S. DFC do not respond to requests for comment, while an IHC spokesperson says the company does not comment on potential investment activity.

Lukoil does not immediately respond to a request for comment. Capital Group, identified by the people as among investors holding frozen securities that could be part of the swap, declines to comment.

More than a dozen companies bid for the assets, including Exxon Mobil, Chevron, Carlyle and Bernd Bergmair. Carlyle exits the process last month, leaving the Boehly consortium in the lead.

Two people say the bank acting for the group buys Lukoil securities from around 10 U.S. and British investment funds, as well as U.S. depositary banks holding them for retail investors. The shares are priced at 30 cents on the dollar, according to two other people, reflecting a steep discount tied to their sanctioned status.

A successful deal would test whether Western sanctions can force a major Russian company to divest overseas operations while preserving strategic oil assets and limiting financial gains flowing back to Moscow. Western funds were major holders of Lukoil stock before Russia's 2022 invasion of Ukraine, but those shares are later removed from key emerging market indices, frozen and written down.

In our earlier article, we covered how sustained geopolitical shocks and elevated fiscal spending are increasing sovereign borrowing risks in a higher interest-rate environment, with emerging and frontier markets especially exposed. We also noted that the Russia-Ukraine war and conflict in the Middle East have pushed up energy and food prices, feeding inflation and tightening pressure on public finances and credit outlooks.

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