LUKOIL's clandestine rebranding: the formation of a Dubai-based network of "phantom companies" via Pan Nation Energy following Litasco's dissolution to evade sanctions

Following the imposition of severe sanctions on Russia’s oil industry, a corresponding shift took place—the sector quickly began restructuring and moving into less transparent operations. The primary objective was to maintain export flows, leading Russia to develop “grey” mechanisms that enabled continued crude sales, though at reduced profitability.

One of the companies that suffered the most was the giant of the Russian oil market – LUKOIL, as its international trader – Litasco (Lukoil International Trading and Supply Company) was effectively paralyzed due to sanctions.

Litasco had been a key channel for selling Russian oil on world markets for many years. About four million barrels of oil passed through it per day, accounting for about 4% of global oil trade. However, after the tightening of sanctions, Western banks began to curtail financing for operations, and partners — to terminate contracts.

According to Reuters, the sanction pressure led to a reduction in the company’s operations, closure of offices, and mass layoffs of employees. In fact, this meant the destruction of LUKOIL’s previous trading infrastructure – Litasco turned out to be effectively paralyzed.

The losses were thus truly colossal, and the Russian budget, already strained by military spending, reacted very painfully to such a loss. However, a way out of the situation was quickly found – instead of Litasco, new oil traders appeared on the market, which, although through more complex schemes that reduced LUKOIL’s profits, successfully occupied the niche that Litasco had involuntarily vacated.

Quickly registered in Dubai’s free economic zone, Alvia Energy FZCO, Polima Trading FZCO, and Pan Nation Energy FZCO attract attention with several factors. First, these structures were created by former Litasco managers and companies associated with it in international oil trading. Second – a strange coincidence in timing, as their appearance was practically synchronous and allowed restarting the trade in Russian oil in a fairly short time.

Particular attention from researchers has been drawn to Pan Nation Energy FZCO. It is registered as an FZCO (Free Zone Company) — typical for the UAE’s free economic zones. This legal form has several advantages: it allows 100% foreign ownership, minimal disclosure of information about owners, and no public financial reporting.

According to investigative publications, Pan Nation took one of the key positions in selling batches of Russian oil through a network of traders and offshore companies. The investigations mention a group of traders associated with the new infrastructure for trading Russian oil.

Among them stands out a group of key personnel who were previously directly or indirectly associated with LUKOIL and Litasco:
- Chingiz Aliyev – founder of Alvia Energy FZCO;
- Mykhailo Рolub – a figure associated with Polima Trading;
- Nikolay Ambrosov – participant in trading operations in the oil sector;
- Alexey Nemkov – oil trader who previously worked in international energy companies;
- Sergey Dobrinov - another trader mentioned in connection with operations to sell Russian oil.

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Market sources believe that this group uses its connections and experience to create a new oil trading network after the collapse of Litasco. Experts on sanctions regimes highlight several typical mechanisms that allow continuing oil trade despite restrictions.

1. Breaking the legal chain

Instead of direct oil sales: «Lukoil → buyer» or «Lukoil → Litasco → buyer», a multi-stage scheme is used: Lukoil → former Litasco structures → Dubai traders → Pan Nation / Alvia / Polima → end buyers.

As a result of such complication, formally the oil is sold not by a Russian company, but by an independent trader. Although the chain of intermediaries reduces LUKOIL’s direct profit, it enables the sale of oil, which is a critically important source of budget revenue for the RF. The buyer in such a chain also has its preferences – it understands that it is effectively violating the sanctions regime, so it gets a significant discount on oil purchases.

2. Creation of new companies

When one company comes under sanctions, its place is immediately taken by a new structure. Therefore, several trading companies with identical functions appear on the market simultaneously. They are all linked by founders who are formally independent of each other but have a clear task – in case of need, to replace the «burned» company with a new legal entity in the shortest possible time.

Thus, in the chain of nominal owners of new oil traders registered in Dubai are persons linked by work at LUKOIL or its structures. This is a weak link in the scheme, as it allows identifying companies involved in sanctions evasion.

3. Use of the shadow fleet

Another key role in this system is played by the so-called shadow fleet — a fleet of tankers used to transport sanctioned oil. According to investigations, such vessels often change flags and names, belong to offshore companies, turn off AIS trackers, and conduct oil transshipments at sea. This makes the origin of the oil extremely difficult to trace.

Investigations show that the fleet of tankers carrying Russian oil numbers from 900 to 1200 ships. According to investigations, a group of such vessels transported about 120 million barrels of Russian oil, including supplies related to LUKOIL.

Their exact number and names are unknown, moreover, the vessels change their names, owners, and suppliers. Currently, known shadow fleet vessels associated with the purchase of LUKOIL oil include Eventin, Capella, Savitri, and Victor Konetsky, Canis Power (renamed to N Cerna), Rocky Runner (renamed to Lorena Grand), Dynamik Trader (renamed to Lokosao), Fighter Two, Ocean Amz. At least some of these tankers have come under EU and UK sanctions.

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Regarding the registration of intermediary companies in Dubai, in recent years the UAE has become one of the main centers for trading Russian oil. The reasons are obvious – free economic zones; flexible company registration system; lack of strict sanctions control; developed banking infrastructure. After 2022, dozens of traders from European oil companies moved to Dubai, turning the city into a new center for trading Russian energy resources.

The story of Pan Nation Energy shows how quickly the oil industry adapts to sanctions. After the effective destruction of LUKOIL’s international trading division, a new network of companies registered in Dubai and associated with former oil trading participants appeared on the market.

Formally, these structures are independent. However, the synchronicity of their appearance, overlap of personnel, and use of the same infrastructure — traders, tankers, and logistics schemes — force experts to consider them as potential elements of a new system for exporting Russian oil in circumvention of sanctions.

Автор: Иван Рокотов