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Russia's Lukoil will earn billions from selling gas in the European Union

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The Russian giant Lukoil may benefit from the sale of gas from Azerbaijan to the European Union, according to a report by the non-governmental organization Global Witness. This is due to the shares held by the Russian company in the British company BP. In the coming years, Lukoil may earn up to USD 7 billion from this.

This is about the agreement signed by the head of the European Commission, Ursula von der Leyen, with President Ilham Aliyev to double gas imports from this country as part of cutting off the European Union from Russia. Global Witness reports that the British company BP, which operates the Azerbaijani field, is partially owned by Łukoil. He holds 19.99 percent in it. shares. This means that the Russian giant can also benefit from transactions with the EU.

Oil platforms on the coast of the Caspian SeaAynur Mammadov / Shutterstock.com

Connections of the Russian Lukoil with the gas supplier to the European Union

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This is about Shah Deniz gas and condensing fields located in the waters of the Caspian Sea belonging to Azerbaijan. It is one of the largest such deposits in the world and the only one in Azerbaijan that exports gas to the European Union.

Because in 2022, as part of the EU's efforts to… cutting off gas from Russia, the head of the European Commission, Ursula von der Leyen, signed an agreement with President Ilham Aliyev to double gas imports from this country. According to experts, the agreement led to an increase in gas exports from Azerbaijan to the EU from 8.1 billion cubic meters in 2021 to 11.4 billion cubic meters. in 2022 and forecast 11.6 billion cubic meters. in 2023

The problem is that although the deposit is operated by the British company BP, Lukoil owns 19.99 percent of it. shares – revealed by Global Witness. And that means that The Russian giant may also benefit from transactions with the EU. And it's not a small amount – as the organization calculated, up to USD 7 billion net, i.e. after deducting taxes, investments and operating costs, in the years 2024-2033. Lukoil documentation obtained by Global Witness shows that European companies with long-term contracts to import gas from Shaz Deniz to the EU include: Shell, Uniper, Engie and Enel.

Lukoil's profits and financing the war in Ukraine

As Politico noted on Thursday, although Lukoil was not on the EU sanctions list, its share in the profits from Azeri gas did not increase Azerbaijan's credibility as an alternative to Russian gas.

All the more so because, as the report revealed, the company, which conducts business throughout the EU, has been one of the main sources of income for the Russian state in recent years. According to ResourceProjects.org, from 2015 to 2020, the company deposited $63.8 billion into Russian government accounts, and this money is currently being used to wage war in Ukraine. Lukoil officially dissociates itself from ties with the Kremlin, assuring that it is a “private company without state participation.”

Main photo source: Aynur Mammadov / Shutterstock.com

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