Deal Insight

LUKOIL buys PETRONAS' Azerbaijan gas assets for US$2.25 billion

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19 October 2021

LUKOIL buys PETRONAS' Azerbaijan gas assets for US$2.25 billion

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
    • Shah Deniz (upstream)
      • Shah Deniz Phase One
      • Shah Deniz Phase Two
    • South Caucasus Pipeline (midstream)
  • Deal analysis
    • Upsides
      • Attractive near-term gas netbacks to Europe
      • BTC blend oil price upside
      • Shah Deniz resource upside
    • Risks
      • Weak longer-term gas netbacks to Europe
      • Turkey gas export uncertainty
      • Failure to realise Southern Gas Corridor expansion ambitions
    • LUKOIL
    • PETRONAS
  • Oil & gas pricing and assumptions

Tables and charts

This report includes 10 images and tables including:

  • Executive summary: Table 1
  • Deal analysis: Table 1
  • Deal analysis: Table 2
  • Deal analysis: Table 3
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2
  • Upstream assets: Table 1
  • Shah Deniz and South Caucasus Pipeline
  • LUKOIL Caspian Sea production by asset
  • Shah Deniz production profile

What's included

This report contains:

  • Document

    LUKOIL buys PETRONAS' Azerbaijan gas assets for US$2.25 billion

    PDF 1.15 MB