ST PETERSBURG, Russia: Russia’s Lukoil may consider spinning off or selling its downstream assets in Europe to focus on exploration both in Russia and abroad, CEO Vagit Alekperov said.
Lukoil, which is pumping around 2 million barrels of oil per day (bpd) — a little less than OPEC member Venezuela does — is refocusing on upstream both at home and abroad, Alekperov said.
“Most likely, in the future, we will consider the following step: Spinning off (the European downstream business to) a European downstream company or selling the assets. In the medium-term, the company will focus on geological exploration.”
Lukoil is not alone in the move: Global oil majors Chevron Corp. and Royal Dutch Shell are putting small refineries on sale as they look to trim lower-margin assets in the face of headwinds from rising crude oil prices.
“This is downstream only — in upstream we are developing and target Mexico, Iran, Norway,” Alekperov said. “Downstream business is very volatile. When we actively entered that (in Europe), it was on its peak, then we survived a trough, now it is good again. Maybe this is a time to withdraw?“
The split of upstream and downstream is something several oil majors have performed in recent years including the third largest US oil company ConocoPhillips, which at one point owned a major stake in Lukoil.
Conoco is now mostly focusing on upstream while its refining division was spun off in a separate unit called Phillips66.
Alekperov said Lukoil will start a drilling program in Western Siberia in September with the aim of slowing down the rate of decline of oil production to 1.5-2.5 percent in 2017 from 6.5-7 percent expected in the region this year.
Production declines in West Siberia will be compensated by Lukoil’s new assets, including the Filanovsky field in the Caspian sea, to be launched this year. Lukoil also runs the giant West Qurna-2 project in Iraq, as well as other assets abroad.
Lukoil’s production in Russia is seen at around 86.5 million tons of oil this year and 87.5-88 million in 2017, he said. Lukoil’s investments are seen at around $8 billion this year and slightly down next year.
GROWING BIGGER
Lukoil is interested in the state’s sale of a 50 percent stake in mid-sized oil producer Bashneft scheduled for later this year and will compete with other domestic players for the asset which produces around 20 million tons of oil a year.
Alekperov said that Lukoil would be interested to buy into the entire Bashneft, to get a ‘synergy effect.’
Yet, he said, at Bashneft’s current market price of around $9 billion and the premium that the state wants to get during the sale, “this asset becomes less interesting for us.”
Bashneft’s market capitalization stood at $9.4 billion on Friday.
“Have you seen our financial report? We have around $5 billion in cash — so we have 60 percent of cash (for a potential deal) and banks are ready to finance us. Private Western banks — Russian private banks of course don’t have such money.”
Alekperov, 65, owns a bit over 20 percent in Lukoil, which he co-founded in the 1990s and turned into a company with a presence in more than a dozen countries around the world.
His partner, vice president Leonid Fedun, owns a little less than a 10 percent stake.
Lukoil’s board will manage Alekperov’s stake in the event he is incapacitated, he said. “If, God forbid, the lion breathes his last and the hyenas eat him, I think that it (the stake) should remain in one piece,” Alekperov said.
“Lukoil will always remain a global company. It will always remain on London and Moscow exchanges. My heirs would not be able to split the stake I own. In my will it is spelled out, they would not manage it. The board will manage it.”
Alekperov said that Fedun and his heirs have to offer Alekperov their holdings first if they decide to sell.
Lukoil to consider spinning off downstream assets in Europe
Lukoil to consider spinning off downstream assets in Europe
Emerging markets driving global growth despite rising risks: Saudi finance minister
RIYADH: Emerging markets now account for a growing share of global output and are driving the bulk of world economic expansion, Saudi Arabia’s finance minister said, even as those economies grapple with rising debt and mounting geopolitical risks.
Speaking at the opening of the annual AlUla Conference for Emerging Market Economies on Feb. 8, Mohammed Al-Jadaan said the role of emerging and developing nations in the global economy has more than doubled since 2000, underscoring a structural shift in growth away from advanced economies.
The meeting comes as policymakers in developing markets try to keep growth on track while controlling inflation, managing capital flows and repairing public finances after years of heavy borrowing. Saudi Arabia has positioned the forum as a platform to coordinate policy responses and strengthen the voice of emerging economies in global financial discussions.
“This conference takes place at a moment of profound transition in the global economy. Emerging markets and developing economies now account for nearly 60 percent of the global gross domestic product in purchasing power terms and 70 percent of global growth,” Al-Jadaan said.
He added: “Today, the 10 emerging economies and the G20 alone account for more than half of the world’s growth. Yet, emerging markets face a more complex and fragmented environment, elevated debt levels, slower trade growth and increasing exposure to geopolitical shocks.”
According to Al-Jadaan, more than half of low-income nations face the risk of debt distress, while global trade growth has slowed to around half its pre-pandemic pace.
Launched in 2025, the conference this year brings together economic decision-makers, finance ministers, central bank governors, leaders of international financial institutions, and a select group of experts and specialists from around the world.
Al-Jadaan said credible fiscal frameworks and disciplined debt management are essential for long-term growth, pointing to Saudi Arabia’s own reform experience.
“Macroeconomic stability is not the enemy of growth; it is actually the foundation. Credible fiscal framework, clear medium-term anchors, and disciplined debt management create the space for investment and reform, especially in volatile global conditions,” he said.
The minister stressed that policy credibility depends on execution rather than plans, adding that structural reforms succeed only when institutions are able to deliver.
The importance of multilateral cooperation is rising as the global system becomes more divided, he said, calling for stronger international financial safety nets for developing economies.
“International cooperation matters more, not less, in a fragmented world. Strong multilateral institutions, effective surveillance and adequate global financial safety nets are essential, particularly for emerging and developing economies,” Al-Jadaan said.
Kristalina Georgieva, managing director of the International Monetary Fund, said emerging markets are growing faster than advanced economies but remain vulnerable to future shocks.
“Growth still lags pre-pandemic levels, and this is doubly concerning as we will surely experience more shocks, but face them with depleted fiscal buffers in many places, with high spending pressures practically everywhere, and rising debt levels in many countries,” she said.
Georgieva outlined two policy priorities emerging economies should embrace to sustain growth.
“First priority, unleash private sector-led growth by cutting red tape, deepening financial markets, strengthening institutions and improving governance,” she said.
Georgieva added: “Second priority is stepping up integration. In a world of shifting alliances and trade partners, there are new opportunities for cooperation at the regional and cross-regional levels.”
Lan Fo’an, China’s finance minister, said the world has entered a period of turbulence marked by unilateralism and geopolitical conflict.
“A cold wave of deglobalization is sweeping across the globe, and the world once again stands at a crucial crossroads,” he said, adding that the global economy expanded 3.3 percent in 2025, below the pre-pandemic average of 3.7 percent.
He called for reforms to global economic governance and greater attention to the needs of developing countries.
“We should improve the global economic governance system through reforms. We should add dialogue over confrontation. We should practice multilateralism to ensure that our countries, regardless of their size or wealth, can participate, make decisions and benefit on an equal footing.”
According to Fo’an, China has joined hands with the Global South to advance cooperation in food security, development financing and climate change.
