Veteran Lukoil CEO Quits Due To Sanctions Fears: Experts

Veteran oil executive Vagit Alekperov resigned Thursday as the head of Russia’s largest privately-owned oil company Lukoil out of fears of attracting additional Western sanctions, analysts told Alexandra Vladimirova of The Moscow Times.

Photo Insert: Lukoil President Vagit Alekperov in a meeting with Russian President Vladimir Putin to discuss the oil and gas company’s performance results

Alekperov began his career in the oil business in the 1970s. Starting as an engineer, he moved up the ranks, eventually becoming the Soviet deputy minister for the oil and gas industry in 1990.

With Russian President Boris Yeltsin’s help, 43-year-old Alekperov reformed a Soviet state oil corporation into privately run Lukoil in 1993 and played a big role in creating the Russian oil and gas industry as it exists today. Lukoil is one of Russia’s largest oil companies with a market value of $52.3 billion, according to Investopedia.

As of April 6, Alekperov occupied the fourth spot on the Forbes list of Russia’s richest people. In 2021 his net worth reached $24.9 billion. However, Alekperov’s net worth has fallen by $14.4 billion so far in 2022 — and is now estimated at around $10.5 billion, according to Forbes.

On March 3, Lukoil became the largest Russian company yet to call for “the immediate cessation of the armed conflict” in Ukraine. Despite the company’s anti-war position, the British government sanctioned Alekperov and 206 other businessmen on April 13 for their close ties to the Kremlin.

However, his reputation started to play against the company’s interests after a massive wave of anti-Kremlin sanctions after it sent troops into Ukraine — and that might have led him to resign, Igor Yushkov, a lead expert at the National Energy Security Fund, told The Moscow Times.

“Alekperov created Lukoil as a private company and took part in shaping the oil industry at the moment of privatization,” Yushkov said. “He helped to create a liberal market model in the industry where main players freely compete in extraction, refining, and trading [the fossil fuels].”

“Alekperov had experience in the industry before Lukoil. His story, in general, could be described as phenomenal,” said Vyacheslav Kulagin, director of the Institute for Economics and Regulation of Natural Monopolies at the Higher School of Economics.

“He shaped his business in the hard times and there were a lot of new players. But very few of them managed to survive this period and strengthen their business.”

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