MILAN – The Italian government intends to scrutinise the potential sale of a refinery owned by Russia’s Lukoil in Sicily to prevent job cuts and the loss of fuel production for the country, Industry Minister Aldo Urso said on Sunday.
The ISAB refinery accounts for around 20% of Italy’s refinery capacity and directly employs 1,000 workers in one of Italy’s poorer regions.
Lukoil had been in talks with U.S. investment platform Crossbridge Energy Partners to sell ISAB in a move that would have helped avoid the halt of the refinery due to an upcoming embargo on Russian oil.
The Russian group, however, has rejected Crossbridge’s offer, the Financial Times reported on Friday, putting pressure on the government to find solutions to avert the refinery’s bankruptcy when the oil embargo starts on Dec. 5.
On Sunday, Urso said he hoped that Lukoil would continue its activities in Sicily or, if it wished to, sell the business to an Italian or foreign investor.
“In this case, since it is a sector in which golden powers exist, any possible transfer of ownership could be conditioned by what we consider fundamental, which is above all the continuity of production and employment levels,” Urso said, talking to Radio 24 broadcaster.
Rome has special anti-takeover regulations or so-called “golden powers” to shield companies deemed of strategic importance from foreign interest.
Marking a break with previous administrations, Prime Minister Mario Draghi’s government has used golden powers to set conditions on scores of deals.
Urso has recently said that Prime Minister Giorgia Meloni’s administration would continue to use such a rules to preserve the country’s national interest.
Last month Italian authorities provided Lukoil with a “comfort letter“to help ISAB refinery get bank financing to buy non-Russian oil but lenders have not yet unlocked the much-needed funds.
One source with knowledge of the matter told Reuters other prospective buyers are also looking at ISAB, citing among others the Norwegian energy group Equinor. The Nordic group was not immediately available to comment on the issue.
