Uzbekistan and Lukoil Discuss Impact of U.S. Sanctions on Joint Projects

Tashkent, Uzbekistan (UzDaily.com) — The state-owned company Uzbekneftegaz is consulting with its Russian partner Lukoil regarding the potential impact of U.S. sanctions on their joint projects in Uzbekistan. This was reported in an interview with Gazeta.uz by Bahodir Sidikov, Chairman of Uzbekneftegaz.

On October 22, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added Lukoil to its sanctions list, imposing blocking measures. These rules give the company and its subsidiaries—where Lukoil holds more than 50%—until November 21 to wind down operations. After that date, U.S. and other foreign citizens and financial institutions are prohibited from providing support, under penalty of sanctions.

“I don’t think there will be any question of a buyout now. We will hear Lukoil’s position as well. I think it’s impossible to buy any asset in such a short time, for any country. Agreeing on a price by 21 November … I, for one, would not sell under such circumstances,” Sidikov said.

He added, “In any case, this will affect both their operations and ours. Financial relations with them will become impossible. Today, we are reviewing all possible options.”

Lukoil is one of the largest investors in Uzbekistan’s fuel and energy sector. In 2024, the company’s total investment in the country exceeded $10 billion. Key projects include the Kandym Gas Processing Complex with a capacity of 8.1 billion cubic meters of gas per year, representing $3.5 billion in investments, as well as gas extraction projects in Bukhara and Kashkadarya regions.

Under production-sharing agreements, Lukoil operates 13 gas fields in Uzbekistan, making it the country’s second-largest gas producer after Uzbekneftegaz. The company also develops a network of gas stations in the country.

Sidikov emphasized that negotiations with Lukoil, and if necessary with U.S. authorities, will be a lengthy process: “There is a platform and the possibility to extend certain sanction deadlines. But we will also need to talk with the U.S. side. It’s a long process.”

Currently, Uzbekneftegaz and Lukoil continue discussing all options to minimize risks and ensure the stable operation of ongoing projects.