Italy’s largest refinery owned by Russia’s Lukoil will not be nationalised, minister says

ISAB refinery has been struggling to secure funding ahead of EU ban on Russian oil

An external view of the ISAB refinery in Priolo-Gargallo near Syracuse, Sicily. AP Photo

Italy’s largest refinery, which is owned by Russia’s Lukoil, is not destined for nationalisation, according to Industry Minister Adolfo Urso.

The Italian government paved the way for putting strategic oil and gas infrastructure under temporary administration on Thursday, in a move which set the stage for a temporary state takeover of the ISAB Lukoil refinery in Priolo, Sicily, which has been struggling to secure funding ahead of a European Union ban on Russian oil due to kick in on December 5.

Asked whether the plant was headed for nationalisation, Mr Urso told the newspaper Corriere della Sera on Saturday: “Absolutely not.”

The government is taking on temporary administration of the refinery with the option of entrusting management to publicly-controlled companies operating in the same sector “to guarantee the continuity of production and therefore the energy supply of the country, also safeguarding employment,” Mr Urso said.

In the meantime, Mr Urso added that the ownership of the refinery can continue talks for ceding it to others.

Italian energy giant Eni could become involved, “and this will give a guarantee of production continuity,” newswire Ansa cited Mr Urso as telling reporters in Sicily on Saturday. Mr Urso also said he had received a US guarantee on Saturday morning that banks which will finance bridge operations will not be subjected to US sanctions.

The urgent law approved by Prime Minister Giorgia Meloni’s cabinet on Thursday gives the government the power to put power stations, pipelines and other energy plants under temporary administration for up to two years, according to a statement. The law is aimed to “defend the national interest on strategic production sectors,” according to a statement.

Italian banks had been wary that extending credit to ISAB would incur secondary sanctions in the US that would restrict access to dollars, Bloomberg reported in November. The refinery is one of Europe’s biggest oil-processing complexes, with a combined capacity of well over 300,000 barrels a day, according to data compiled by Bloomberg.