Exclusive-U.S. Treasury rejects Xtellus-led bid for Lukoil assets, sources say

By Jarrett ‌Renshaw, David Gauthier-Villars and Anna Hirtenstein

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, three people close to the matter told Reuters.

Xtellus had been competing against U.S. oil majors Exxon Mobil and Chevron, Abu Dhabi group International Holding Company, Hungary's MOL ⁠and U.S. private equity firm Carlyle, all of which still remain in the race.

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 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.

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.

(Reporting by Jarrett Renshaw, David Gauthier-Villars and Anna HirtensteinWriting by Dmitry ZhdannikovEditing by Tomasz Janowski and David Goodman)