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Guardian: UK oil refinery extends credit with oil company linked to sanctioned Russian oligarch

by Dmytro Basmat January 3, 2024 2:34 AM 2 min read
An Urals oil field operated by Lukoil. (Dmitry Beliakov/Bloomberg via Getty Images)
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One of the United Kingdom's largest oil refineries has extended a loan facility with the arm of an oil company founded and part-owned by a sanctioned Russian oligarch, the Guardian reported on Jan. 2.

Recently filed accounts reveal that oil refinery owner Essar Oil UK extended a $500m “payment facility" to Litasco, the oil trading division of Moscow-based Lukoil. The agreement effectively comes into force as a line of credit allowing Essar to buy fuel and pay later.

Litasco is wholly owned by Lukoil, whose founder, Russian oligarch Vagit Alekperov, was placed under sanctions by the UK in April 2022. Alekperov previously stepped down as a director of Lukoil shortly after he was placed under sanction but remains an 8.5% shareholder.

Lukoil is under sanctions in the U.S. but not in the U.K. or EU. Litasco is not under sanctions in any of the jurisdictions, having succeeded in a High Court decision that determined that Alekperov did not exert direct control over the company.

The two-year agreement between Essar Oil UK and Litasco was slated to initially conclude in May 2023, but has been extended to June 2024. According to financial records, $320 million of the total $500 million is slated for reimbursement within the next 12 months.

A close associate to Russian dictator Vladimir Putin, Alekperov has been frequently pictured with Putin. In the days leading up to the Russian invasion of Ukraine, Alekperov was among a large group of oligarchs summoned to the Kremlin in late February 2022. The oligarch's personal wealth has previously been estimated to be $20 billion.

Despite the efforts of Western government to implement sanctions on companies and oligarchs accused of supporting Russia's invasion, many continue to take to lawsuits to halt attempts to seize assets.

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