Russia’s Lukoil chief Alekperov resigns after being sanctioned

Lukoil is Russia’s second largest oil producer.

Vagit Alekperov was among the founders of what later became Lukoil in 1993 [File: Aaron M. Sprecher/Bloomberg]

Russia’s second-largest oil producer Lukoil PJSC said Chief Executive Officer Vagit Alekperov will resign, in the latest sign of growing pressure on the nation’s energy industry since the invasion of Ukraine.

The 71-year-old Alekperov joins a long list of Russian CEOs who have stepped down after being targeted with Western sanctions. The bosses of the country’s biggest petrochemical producer Sibur Holding, internet company Yandex NV and e-commerce firm Ozon Group have all resigned in recent months.

Alekperov, who was sanctioned by the U.K. and Australia earlier this month, informed the company about his decision to resign as a member of the board of directors and as president, Lukoil said in a statement on Thursday. As of March 31, Alekperov owned 3.12% voting shares and was the beneficiary of 5.43% of shares without voting rights, according to the statement.

Lukoil fell as much as 7.9% to 3,970 rubles a share and was trading down 7.2% as of 6:36 p.m. in Moscow, to the lowest since the end of February when Russia invaded Ukraine.

The board of directors appointed Vadim Vorobyev, who is first executive vice president, as its acting president, local news outlet RBC reported, citing two unidentified people close to the company. Lukoil declined to comment when contacted by Bloomberg.

Alekperov was among the founders of what later became Lukoil in 1993. The company accounts for about 15% of Russia’s oil output, second only to state-controlled Rosneft PJSC. Its daily output averaged 1.61 million barrels from April 1 to 19, according to data from the Energy Ministry’s CDU-TEK unit that’s been seen by Bloomberg.

In Russia, Lukoil’s main fields are located in West Siberia, as well as developments on the north of the Caspian Sea. It also has upstream businesses in some former Soviet countries, including in Kazakhstan, Uzbekistan and Azerbaijan, where it completed earlier this year the acquisition of an additional stake in the Shah Deniz offshore gas project operated by BP Plc.

One of Lukoil’s biggest projects abroad includes the West Qurna-2 field in southern Iraq, which it operates. The company also has interests in several projects on the African continent, and participates in several blocks in Mexico’s waters.

(Updates with shares, RBC report on interim CEO, from fourth paragraph.)

Source: Bloomberg