Algeria-based Sonatrach has proposed an acquisition of ExxonMobil’s Augusta refinery in Sicily, Italy.
The deal will include three fuel storage terminals and pipelines in Augusta, Palermo and Naples. It will be Sonatrach’s first overseas purchase.
The acquisition is said to be feasible due to synergies between the Skikda refinery and the Augusta refinery, which is capable of processing 175,000 barrels of oil equivalent per day (bpd) of Sahara blend.
Following the acquisition, the plant will be directly integrated into Sonatrach’s refinery system.
Reuters quoted Sonatrach CEO Abdelmoumen Ould Kaddour as stating: “We are extremely proud to make our first investment in international refining in Italy.
“It will be able to process directly products that are surplus in Algeria in order to re-import products that are in deficit, such as diesel and petrol.”
Algeria has recently been struggling to attract overseas oil and gas investments and meet fuel demands in its domestic market. In 2016, Sonatrach paid $800m to import fuel, which tripled to $2.5bn the following year.
Following the acquisition, Kaddour told French news agency Les Echos that the company plans to sign a deal with Total to construct a petrochemical plant in Algeria.
Kaddour said: “It will be the first unit to produce propylene and polypropylene in Algeria, most of it will be exported to Europe.”
Ould Kaddour became CEO last March and has since been trying to resolve disputes with foreign companies.
