Exclusive-Saudi-backed Midad signs term sheet with Lukoil for sanctioned assets, pending approvals

FILE PHOTO: A Lukoil fuel station is pictured in Newark, New Jersey, U.S., March 3, 2022. REUTERS/Eduardo Munoz/File Photo · Reuters

By Jarrett Renshaw and Dmitry Zhdannikov

Fri, February 13, 2026 at 6:05 AM GMT+9 2 min read

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LKOH.ME

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By Jarrett Renshaw and Dmitry Zhdannikov

Feb 12 (Reuters) - Saudi-backed Midad Energy has signed a term sheet to acquire Russia’s sanctioned Lukoil assets in a high-stakes contest against rivals including private equity ‌giant Carlyle Group, with the deal contingent on U.S. regulatory approval, according to three people ‌familiar with the matter.

The move highlights continued efforts by the Russian energy giant to offload overseas holdings constrained by Western sanctions and underscores ​growing Middle Eastern interest in acquiring discounted global oil and refining assets, even as transactions remain subject to strict regulatory scrutiny and geopolitical risk.

The agreement, signed in late January, covers all of the targeted assets, the sources said. Midad agreed to place its all-cash offer in escrow while the companies seek the necessary regulatory clearances, including from ‌the U.S. Treasury, a structure designed ⁠to preserve the transaction while navigating sanctions 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,” said a source familiar with the deal.

Midad and Lukoil did not respond to a request for comment. The U.S. Treasury did not immediately respond to a request for comment.

U.S. authorities in recent months have issued a series of ​temporary ​general license extensions related to sanctioned Russian energy assets, allowing ​limited time for maintenance, wind-down activities and, ‌in some cases, the exploration of potential divestment under strict conditions, people familiar with the process said. The extensions are intended to prevent abrupt disruptions to energy markets while giving regulators oversight of any ownership changes.

Any final transfer of Lukoil’s sanctioned assets would still require explicit U.S. approval, and there is no guarantee Washington will authorize a sale, particularly given ongoing geopolitical tensions and the complex compliance reviews involved, the sources added.

The negotiations ‌are unfolding against the backdrop of the ongoing Ukraine-Russia war, which ​President Donald Trump has struggled to bring to a close ​despite earlier promises of a swift end to ​the conflict, adding further uncertainty to the regulatory and geopolitical environment surrounding any potential ‌transaction.

Midad had previously emerged as one of the ​leading contenders to buy Lukoil’s ​international portfolio, which spans oilfields, refineries and thousands of fuel stations worldwide and drew interest from a range of global investors, including a rival bid from private equity firm Carlyle, Reuters reported earlier.

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Lukoil ​has been seeking to divest foreign ‌operations hit by sweeping U.S. sanctions, which have complicated efforts by Russian energy firms to sell ​overseas assets and forced buyers and sellers to use escrow and conditional-payment mechanisms while awaiting ​government sign-off.

(Reporting By Jarrett Renshaw, Editing by Nick Zieminski)

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