Russian oil giant Lukoil earns billions bypassing EU sanctions

Russian oil company Lukoil, which earned nearly €100 billion last year, is bypassing European Union sanctions through a clever legal arrangement involving a subsidiary registered in Ireland.

Source: The Currency, an Irish online media outlet

Details: Lukoil Capital Designated Activity Company was established in September 2021, just months before Russia launched its full-scale invasion of Ukraine. Its sole function is to issue bonds on international markets, raising billions of dollars for the Russian parent company.

The total amount of bonds issued through the Irish subsidiary is US$2.3 billion. These funds ultimately reach the parent company in Russia.

The Irish subsidiary itself is not subject to sanctions, as the EU has not formally banned Lukoil’s operations – unlike the United States and the United Kingdom. This allows the Russian oil giant to maintain access to Western capital markets despite international isolation.

The directors of Lukoil Capital are linked to Vantru, a corporate services firm based in Northern Ireland. These same individuals also manage the Irish branch of a Moscow airport, which has also drawn journalistic attention.

In comments to The Currency, Vantru founder Rory Mulvaney confirmed that his firm works with Irish companies linked to Russia. He believes it is legal to raise funds from Russian businesses to pay Western investors, provided such payments are not prohibited.

Background:

• The European Union is considering imposing sanctions on a Dubai-based trading unit of Russian oil giant Lukoil PJSC.
• Lukoil also plans to sell its oil refinery in Bulgaria – its largest asset in the Balkans – to a Qatari-British consortium.

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