Chevron Eyes $22 Billion Bid for Lukoil's International Assets: Report
The move, in partnership with Quantum Energy Partners, comes as the oil giant digests its recent $53 billion Hess takeover, signaling an aggressive growth strategy.
Chevron is reportedly preparing a major move to expand its global footprint, partnering with private equity firm Quantum Energy Partners for a potential joint bid to acquire the international assets of sanctioned Russian oil giant Lukoil for an estimated $22 billion.
The initial report from the Financial Times details a plan where the two American firms would seek to acquire and divide Lukoil's sprawling international portfolio. These assets, which Lukoil has been compelled to sell following the imposition of U.S. sanctions, include a vast network of production facilities, refineries, and more than 2,000 retail gas stations across Europe and Asia.
This potential bid surfaces just as Chevron finalizes its monumental $53 billion all-stock acquisition of Hess Corporation, a deal that reshapes its portfolio with a coveted 30% stake in Guyana's prolific Stabroek Block. A subsequent $22 billion move suggests an unabated appetite for large-scale acquisitions, underpinning an aggressive strategy to secure long-term production and cash flow.
Shares of Chevron fell in recent trading, closing down 4.46% at $156.54. Despite the drop, the company maintains a colossal market capitalization of approximately $330 billion, positioning it with the financial heft required for such a significant transaction. The reported bid represents a substantial investment, yet it is part of a broader strategic pivot that includes divesting $10 to $15 billion in non-core assets by 2028 to sharpen its focus on higher-return projects.
The pursuit of Lukoil's assets is not without complexity and risk. Acquiring assets being sold by a sanctioned Russian entity, even if they are located internationally, will likely draw intense regulatory scrutiny. Lukoil has been reviewing bids under a specific wind-down license from the U.S. Office of Foreign Assets Control (OFAC). However, the geopolitical optics remain sensitive.
For Chevron, the opportunity lies in acquiring geographically diverse and established energy infrastructure, potentially at a valuation impacted by the forced nature of the sale. According to reports, Quantum Energy is taking the lead on the potential deal, with other major players like Carlyle and Abu Dhabi's International Holding Company also showing interest, indicating a competitive bidding landscape.
Analysts remain broadly positive on Chevron, with a consensus target price around $172, suggesting upside from its current level. Of 26 analysts providing ratings, 15 rate the stock as a 'Buy' or 'Strong Buy', while 10 maintain a 'Hold' position. This potential transaction would likely be a key topic of discussion, weighing the strategic growth against the inherent geopolitical risks.
The move aligns with CEO Mike Wirth's stated focus on capital discipline and shareholder returns. The successful integration of Hess's low-cost, high-margin assets from Guyana and the Bakken shale is expected to significantly boost Chevron's cash flow. Adding Lukoil's international downstream and production assets could further diversify the company's revenue streams, complementing its strong position in upstream exploration and production.