Carlyle Group, a leading global alternative asset manager, is reportedly in preliminary discussions with investors from the United Arab Emirates (UAE) to potentially partner on the acquisition of international assets from the Russian oil producer Lukoil. News of these talks emerged just a day after Carlyle and Lukoil announced a preliminary agreement for the transfer of a broad range of overseas assets to the U.S. private equity firm. These assets are valued at approximately $20 billion.

The potential deal with Carlyle comes as Lukoil faces a February 28 deadline set by the U.S. Treasury to divest its international assets, following sanctions imposed in late 2025. These sanctions are part of a broader effort by the U.S. to pressure Russia to end the war in Ukraine.

The portfolio of assets under discussion includes significant upstream assets, most notably a 75% stake in Iraq's West Qurna 2 oilfield, as well as downstream operations, including refineries in Bulgaria and Romania. Sources familiar with the matter indicate that Abu Dhabi-based entities, including Mubadala Investment Company, XRG, and International Holding Company (IHC), have engaged in discussions regarding the possibility of taking minority stakes in the portfolio. There is reportedly specific interest among UAE investors in Litasco, Lukoil's Geneva-based trading arm.

While these discussions are ongoing, no formal agreements have been finalized. Lukoil has also stated it remains in talks with other potential buyers. Carlyle has confirmed that any structured transaction will strictly comply with regulations of the U.S. Treasury's Office of Foreign Assets Control (OFAC) to navigate the risks associated with secondary sanctions on Russian entities. Under current OFAC guidance, proceeds from the sale must be deposited into U.S.-controlled accounts and will remain frozen until sanctions against Lukoil are lifted.

Carlyle, with a market capitalization of $21.18 billion and $474.1 billion in assets under management, operates across global private equity, global credit, and investment/fund solutions. The firm's potential acquisition of Lukoil's international assets aligns with typical private equity cycles, where energy assets are optimized over a five-year holding period before a strategic exit.

The completion of any deal remains contingent on rigorous due diligence and formal approval from OFAC. It's worth noting that the deal excludes Lukoil's assets in Kazakhstan, which the Russian producer intends to retain under existing licenses.

Carlyle's financial health presents a mixed picture, with a concerning three-year revenue growth rate of -15.4%. The company reported revenue of $2.99 billion, a net margin of 22.14%, and a pre-tax margin of 32.22%. Carlyle's debt-to-equity ratio is 2.25, which indicates a high level of leverage. Recent insider selling activity, with 625,000 shares sold, raises questions about internal confidence in the company's future prospects.