US government and Gulf billionaires back Todd Boehly bid for Lukoil assets

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Billionaire financier Todd Boehly has secured the backing of the US government and Gulf power brokers with ties to the Trump family to bid for the international assets of Lukoil, which were put up for sale after the Russian oil company was hit with US sanctions last year.

Boehly, who sold his stake in Chelsea Football Club last week, had been working on a potential deal for months, two people close to the process said, aiming to unseat US private equity group Carlyle, which agreed to buy the assets in January.

The US International Development Finance Corporation and Sheikh Tahnoon bin Zayed al-Nahyan, brother of the UAE’s president, are in Boehly’s consortium. Qatar’s billionaire Al-Khayyat family, which has worked closely with the White House and Trump family members on property and energy projects, is also included.

The DFC, which is part of the US federal government and invests in overseas projects, is expected to take a mid-teens equity stake in the new company, said two people familiar with the matter. The agency is headed by Ben Black, the son of Leon Black, the co-founder of private equity firm Apollo.

The Boehly group has not yet finalised a deal with Lukoil. People familiar with the matter said its proposal was advanced, but the extent of any conversations between the parties was unclear.

The potential deal comes 10 months after the Russian company agreed to sell its sprawling international business to Carlyle after being hit with US sanctions, a transaction that has stalled in Washington awaiting final US approval.

Lukoil’s overseas assets, valued at $20bn when they were written off in March, include oil and gas fields from central Asia to Mexico, thousands of petrol stations and a large European refining portfolio.

The sale of the assets presents a rare opportunity to snap up more than 3bn barrels of proven and probable reserves, as well as some of Bulgaria and Romania’s biggest refineries.

Boehly’s proposal would put the US government in the unusual position of simultaneously bidding for the assets while another part of the administration decides their fate.

Other bidders who had previously expressed interest in some or all of the assets have now dropped out, according to one person familiar with the process.

The proposal raises the question of whether Carlyle would be disadvantaged if pitted against a consortium involving the US government and investors with ties to the administration, in a decision made by the White House.

One person familiar with the process said: “Yes, there is that concern.”

Sheikh Tahnoon’s International Holding Company is expected to lead the consortium with Allied Investment Partners of the UAE, according to a person familiar with the discussions.

The Al-Khayyat family would take a smaller stake, while Boehly and the DFC would control a majority of the board, the person said.

The Al-Khayyat brothers have emerged as increasingly prominent partners in projects involving figures close to the Trump administration. 

The family has a stake in an Albanian property development involving Ivanka Trump and Jared Kushner. It is also pursuing a potential reconstruction of Syria’s pipeline network as part of a project involving Tom Barrack, the US special envoy to Syria and a longtime Trump associate.

UCC, a company controlled by the Al-Khayyat family, has also recently secured an oilfield concession in Libya that was not awarded through an open tender and is taking a minority stake in a Venezuelan gasfield operated by BP.

Lukoil has agreed a separate deal to sell its interests in Kazakhstan to the country’s government, subject to US Treasury approval. Its stake in the West Qurna oilfield has also been transferred to Iraq. An initial attempt to take over the Lukoil business by trading house Gunvor was rejected by the US Treasury. 

Boehly has risen to prominence with eye-catching investments in sports, minerals and media influencers, but the growth engine of his investment business is a $60bn life insurer that invests the savings of US retirees.

Kansas-based Security Benefit, one of the US’s top sellers of annuities, invests about 40 per cent of its portfolio in assets linked to other parts of Boehly’s empire.

Boehly’s insurance holdings have come under scrutiny, however, amid a probe into insurers controlled by his longtime business partner and former Chelsea co-owner Mark Walter.

The White House, UCC and Boehly declined to comment. Lukoil and IHC did not respond to a request for comment.

Additional reporting by Chloe Cornish and Ivan Levingston