Deal Insight
LUKOIL buys PETRONAS' Azerbaijan gas assets for US$2.25 billion
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
LUKOIL has announced the US$2.25 billion acquisition of PETRONAS' 15.5% stake in the giant BP-operated Shah Deniz gas-condensate field, offshore Azerbaijan. The deal also includes PETRONAS' identical interest in the South Caucasus Pipeline (SCP) export route to Turkey's eastern border. The transaction will have an effective date of 1 January 2022.LUKOIL will become the second-largest partner in the projects, after BP (28.8%), increasing its interest from 10.0% to 25.5%.
Table of contents
- Executive summary
- Transaction details
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Upstream assets
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Shah Deniz (upstream)
- Shah Deniz Phase One
- Shah Deniz Phase Two
- South Caucasus Pipeline (midstream)
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Shah Deniz (upstream)
- Deal analysis
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Upsides and risks
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Upsides
- Attractive near-term gas netbacks to Europe
- BTC blend oil price upside
- Shah Deniz resource upside
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Risks
- Weak longer-term gas netbacks to Europe
- Turkey gas export uncertainty
- Failure to realise Southern Gas Corridor expansion ambitions
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Upsides
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Strategic rationale
- LUKOIL
- PETRONAS
- Oil & gas pricing and assumptions
Tables and charts
This report includes the following images and tables:
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Executive summary: Table 1Deal analysis: Table 1Deal analysis: Table 2
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Deal analysis: Table 3Oil & gas pricing and assumptions: Table 1Oil & gas pricing and assumptions: Table 2Upstream assets: Table 1Shah Deniz and South Caucasus PipelineLUKOIL Caspian Sea production by assetShah Deniz production profile
What's included
This report contains:
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