Russia’s Lukoil considers selling Swiss trader Litasco
LONDON/MOSCOW: Russian oil major Lukoil is considering selling its Swiss unit Litasco because new US sanctions on Russia will make it harder for the Geneva-based energy trader to raise new funds, industry sources said.
Lukoil’s chief executive, Vagit Alekperov, later confirmed the company was considering selling Litasco, Interfax news agency reported. He gave no details other than to say Lukoil’s board would decide on the matter in November.
A senior industry source told Reuters Litasco could be sold later this year, possibly as a first step towards divestment of other overseas assets by Lukoil to enable Russia’s second largest oil producer to focus on tapping fields in Siberia.
“One of the reasons behind the sale idea is sanctions. The sale will also help divert a big chunk of working capital from trading activities towards upstream projects in Russia,” the source told Reuters on condition of anonymity as he is not authorised to discuss the possible sale in public.
Lukoil controls refineries in Romania, Bulgaria, Italy and the Netherlands.
The sources did not say how much Lukoil might raise by selling Litasco, one of the largest global energy traders. Most trading houses are not publicly listed and the book value of rivals range from US$2 billion to US$6 billion.
The sale of Litasco would provide more evidence of how the latest US sanctions have complicated lending to Russian companies – state and private – and even hit overseas entities only indirectly connected with Russia.
Banking sources told Reuters last week that Italian bank Intesa Sanpaolo had encountered problems syndicating a loan to mining and commodities trading group Glencore and Qatar’s wealth fund to fund their purchase of a stake in the Russian oil major Rosneft because of the new US sanctions.
The sanctions, signed into law by President Donald Trump on August 2, were Washington’s strongest action against Moscow since 2014, when it first took steps to punish Russia over its annexation of Crimea from Ukraine and Russian support for separatists in east Ukraine. — Reuters