Lukoil Refinery in Italy: Potential Approval under Strict Conditions

The Italian government has approved the sale of Lukoil's refinery in Sicily to the investment company G.O.I. Energy, but with strict conditions under the "golden power" regulation. The transaction is Lukoil's first significant asset sale since the Russian invasion of Ukraine.

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Lukoil’s refinery in Sicily is to be sold to private equity firm G.O.I. Energy, according to sources close to the deal cited by Reuters. This transaction is subject to review by the Italian government under a regulation called “golden power”, which aims to protect industries deemed strategic in sectors such as banking, energy, telecommunications and health.

First significant asset sale for the Lukoil refinery

Lukoil’s ISAB refinery, which processes 320,000 barrels of crude per day, represents one-fifth of Italy’s refining capacity and directly employs about 1,000 people in an economically depressed region in the south of the country. This sale is Lukoil’s first significant asset sale since the Russian invasion of Ukraine. Despite several competitors, including the U.S. investment platform Crossbridge, G.O.I. Energy won the bid with the support of commodity trader Trafigura. Sources say the Italian government has approved the sale, but subject to strict conditions to protect jobs and environmental standards.

Rome asks for guarantees for the sale of the Lukoil refinery in Italy

In addition, Rome has asked G.O.I. Energy to guarantee oil supplies from other producing countries than Russia. Italy’s use of “golden power” generally results in the approval of transactions subject to binding conditions to preserve the national interest. There was speculation that the U.S. was concerned about the sale of the ISAB refinery, located in Priolo, about 50 kilometers from a NATO base in Sigonella. In a statement released in February, G.O.I. Energy said the company and its CEO Michael Bobrov have no ties to Russia.

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