This article first appeared on GuruFocus .
Lukoil PJSC reported a sharp reversal in its financials after fully writing down its foreign operations, reflecting the impact of US sanctions on its international business. The company recognized 1.67 trillion rubles ($19.8 billion) in impairments tied to the loss of control over overseas assets, resulting in a net loss of 1.06 trillion rubles for the year, compared with a profit a year earlier. The charges were linked to assets now treated as discontinued operations following the disruption of its global portfolio.
The pressure traces back to US measures targeting Lukoil and Rosneft PJSC, which have complicated operations across its international network. Lukoil had built one of the most geographically diversified portfolios among Russian oil producers, with refinery stakes in Europe, oil field positions from Iraq to Kazakhstan, and around 5,300 fuel stations spanning 20 countries, including the US. That reach has now been forced into retreat as the company explores divestments.
A potential exit is underway but remains conditional. Lukoil agreed in January to sell most of its international assets to Carlyle Group ( NASDAQ:CG ) after a prior deal with Gunvor Group collapsed, though completion still depends on regulatory approvals. The company indicated the outcome hinges on the US Office of Foreign Assets Control, and any proceeds could be placed in restricted accounts, with access only possible after sanctions are lifted, suggesting that even a completed sale may not immediately translate into usable cash.
