Swiss commodity major Gunvor has pulled a $22-billion bid for Lukoil’s international business after the U.S. Treasury Department signaled it was not happy with the deal, calling the company a Russian “puppet”.
“President Trump has been clear that the war must end immediately. As long as Putin continues the senseless killings, the Kremlin’s puppet, Gunvor, will never get a license to operate and profit,” the Treasury said in an X post.
Gunvor was co-founded by its current CEO, Torbjorn Tornqvist, and Russian businessman Genadiy Timchenko, who sold his stake in the commodity trader back in 2014. Like many other large businessmen from Russia, Timchenko is under Western sanctions.
In response, Gunvor told Reuters in a statement that what the Department of the Treasury had written was “fundamentally misinformed and false, adding that it would be happy to clear any misunderstandings. Until that happened, however, Gunvor was pulling its bid for Lukoil’s international business.
The company’s decision follows a fraught few days during which chief executive officer Torbjorn Tornqvist had to repeatedly assure anyone interested that the deal did not feature a buyback clause for Lukoil, which was apparently a top concern for Western market regulators. Tornqvist also warned that unless regulators approved the deal in a timely fashion, there could be a disruption of fuel supply in Central and Eastern Europe after the U.S. sanctions kick in on November 21.
“The magnitude of this deal needs regulatory work. It cannot be completed in two weeks. Lukoil’s whole international operations are paralysed. Nobody can transact with them. A lot of jobs are at stake and the refining capacity could be very disrupted,” Tornqvist told the Financial Times earlier this week.
Lukoil has faced escalating restrictions on its global operations since the onset of Western sanctions following Russia’s invasion of Ukraine. The company holds a range of international upstream and downstream assets across Europe, the Middle East, and Africa, including refineries in Italy and the Netherlands, and upstream stakes in Iraq, Uzbekistan, and West Africa.
By Irina Slav for Oilprice.com
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