The Italian Government has given a conditional approval for the sale of a refinery owned by Russian energy company Lukoil in Sicily, news agency Reuters reported.
The refinery is being sold to GOI Energy, part of the ARGUS New Energy Fund, which is managed by a Cyprus-based private equity and asset management company.
Some important conditions have been laid by the Italian government, which include no job cuts, maintaining environmental standards, and a commitment from GOI Energy to not source oil required for the refinery from Russia.
The government is said to have used its discretionary powers to approve the deal. The transaction was reviewed under the “golden power” regulation, which empowers the government to approve deals of strategic importance in key industries such as healthcare, telecommunications, banking and energy.
In January this year, Lukoil’s wholly-owned subsidiary LITASCO entered into an agreement to sell the ISAB refinery to GOI Energy.
The ISAB refinery is one of the largest refineries in Europe, with three production sites that are interconnected through a system of pipelines. The complex includes refining, gasification, electricity cogeneration plants.
It has a capacity to refine 320,000 barrels of crude oil a day (bcopd), which amounts to one-fifth of the country’s total refining capacity. The refinery has has a workforce of about 1,000.
GOI Energy partnered with Trafigura, an international oil trader, for an efficient operation of the refinery. The partnership will ensure uninterrupted oil supply to the refinery and production offtake while helping it with the necessary working capital.