A nationalization is among the several options for Lukoil’s Italian refinery based on the island of Sicily, Italy’s ecological transition minister Roberto Cingolani said on Saturday during an event organized by Il Foglio newspaper.
Cingolani also noted another option in which the refinery is bought by an external buyer, for example, without elaborating on who this buyer could be.
The European Union leaders agreed in late May on a gradual embargo of Russian crude by 90% by the end of 2022, with some exemptions, but the ban on seaborne imports could severely impact the ISAB refinery and would deal an economic blow to the depressed region’s economy.
Accounting for around 20% of Italian refining capacity, the port-side refinery in Sicily’s Syracuse province employs around 3,500 people at three production sites – including a refinery, gasification, and electricity cogeneration plant – and generates half of the provincial GDP and 8% of the region’s economic activity.
Since international banks are no longer providing it with credit to buy oil from non-Russian sources, ISAB Srl has paradoxically gone from processing 30-40% of Russian crude to 100% due to the previous sanctions against Russia.
The temporary nationalization of ISAB came up in April as a potential solution the government of the Italian Prime Minister Mario Draghi was considering in case of sanctions on Russian oil.
No comments were issued by Lukoil on the potential changes.
Meanwhile, the Belgian press wrote that the oil embargo the EU imposed on Russia reportedly will not affect the Lukoil’s business in Belgium where it operates through Lukoil Belgium N.V. and Lukoil Netherlands B.V.
According to Lukoil Belgium, the embargo does not prevent the normal operations of its retail networks and fuel terminals in Benelux since its subsidiaries buy all their gasoline and most of their diesel directly on the Amsterdam-Rotterdam-Antwerp (ARA) market.
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