Saudi-backed Midad eyes Lukoil assets deal

The move underscores ongoing efforts by the Russian energy giant to divest foreign holdings constrained by Western sanctions. It also reflects increasing interest from Middle Eastern investors in acquiring discounted oil and refining assets globally, even as such transactions face rigorous regulatory scrutiny and geopolitical risk.

The agreement, signed in late January, reportedly covers all of the targeted assets. Under its terms, Midad will place its all-cash offer in escrow while both sides seek the necessary regulatory clearances, including authorization from the US Treasury. The escrow structure is intended to preserve the deal while navigating sanctions-related restrictions.

“Midad is working to secure necessary regulatory compliance. The bid is viewed as a high-stakes move supported by strong political connections with Saudi,” one source familiar with the negotiations said.

In recent months, US authorities have issued temporary general license extensions related to sanctioned Russian energy assets. These extensions have allowed limited maintenance and wind-down activities, and in some cases have permitted preliminary exploration of divestment options under strict conditions. According to people familiar with the process, the aim is to avoid sudden disruptions to energy markets while maintaining regulatory oversight of potential ownership changes.

However, any final transfer of Lukoil’s sanctioned assets would require explicit US approval. Sources cautioned that there is no assurance Washington will authorize the sale, particularly amid continuing geopolitical tensions and complex compliance reviews.

The talks are unfolding against the backdrop of the ongoing Ukraine-Russia war. President Donald Trump has faced challenges in bringing the conflict to an end despite earlier pledges, adding further uncertainty to the regulatory and geopolitical environment surrounding the potential deal.

Midad previously emerged as a leading contender to purchase Lukoil’s international portfolio, which includes oilfields, refineries and thousands of fuel stations worldwide. The assets have attracted interest from several global investors, including Carlyle, as reported earlier.

Lukoil has been seeking to divest foreign operations affected by sweeping US sanctions, which have complicated sales of overseas assets. Buyers and sellers have increasingly relied on escrow arrangements and conditional payment mechanisms while awaiting government approvals.