LONDON, Dec 15 (Reuters) - The U.S. Treasury has rejected an offer from a group led by U.S. bank Xtellus Partners for the foreign assets of Russian oil company Lukoil (LKOH.MM) , opens new tab, four people close to the matter told Reuters.

Xtellus had been competing against U.S. oil majors Exxon Mobil (XOM.N) , opens new tab and Chevron (CVX.N) , opens new tab, Abu Dhabi group International Holding Company (IHC.AD) , opens new tab, Hungary's MOL (MOLB.BU) , opens new tab and U.S. private equity firm Carlyle (CG.O) , opens new tab, all of which still remain in the race.

Sign up here.

The U.S. Treasury declined to comment.

Lukoil offered to sell the assets after the U.S. imposed sanctions on it and Kremlin-controlled rival Rosneft (ROSN.MM) , opens new tab in October to try to push Russia towards a peace deal with Ukraine.

More than a dozen companies have bid for Lukoil's assets, which are valued at about $22 billion. The assets include upstream oil and gas projects, refining and more than 2,000 filling stations across Europe, Central Asia, the Middle East and the Americas.

Xtellus had offered to organise a swap of Lukoil securities held by U.S. investors in a cashless deal to return them to Lukoil in exchange for the Russian company's global assets, sources told Reuters.

The sources said Lukoil had favoured the Xtellus bid but it was complex to execute. Xtellus is advising bid partners American billionaire Todd Boehly and Emirati investor group Allied Investment Partners. One of the sources said Lukoil and the Xtellus-led group have already signed a share purchase agreement.

The Treasury told the group that it doesn't have permission to use sanctioned securities in a transaction and that was why their proposal was rejected, the source said.

Now the plan is to try to escalate their offer to a more senior decision-maker and get the rejection reversed. The group will also apply for a license to access these securities, they said.

U.S. investment funds own large holdings of Lukoil shares that were frozen and written down after Russia's 2022 invasion of Ukraine, losing the funds billions of dollars. The idea was to transfer the shares back to Lukoil in exchange for the assets, sell the assets to energy companies and pay the investors.

Last week the U.S. extended the deadline for negotiations with Lukoil to January 17.

https://www.reuters.com/business/us-treasury-rejects-xtellus-bid-russias-lukoil-assets-sources-say-2025-12-15/