The Italian government has placed a refinery in Sicily owned by Russia’s largest private oil company, Lukoil, under state trusteeship, days ahead of an EU embargo on Russian crude oil imports, AFP reported on Thursday, citing government sources.
The ISAB facility near Syracuse is one of the biggest in Europe and refines a fifth of Italy’s crude. The plant has relied solely on Russian Urals oil and now risks stopping production and being closed once the ban comes into force on December 5.
The Italian government is working on a “temporary solution” to keep the refinery operational in order to save jobs and secure energy supplies, and does not rule out nationalization, La Republica reported, citing the president of the Sicily region, Renato Schifani.
With the state taking over management, the plant will be able to continue production by purchasing oil from other suppliers, with state-owned credit agency SACE providing guarantees to the creditor banks, the paper added.
According to the Italian Ministry of Economic Develoment, the “provisional administration” of the ISAB refinery will last up to one year, with a possible extension for another 12 months “in the event of serious and imminent danger” to the security of energy supplies.
“The emergency intervention is aimed at protecting both a strategic national energy center and the employment levels so important for Sicily and the whole country,” Italian Prime Minister Giorgia Meloni said in a brief statement.
Although Lukoil is not under EU sanctions, Western banks are unwilling to deal with the Russian company for fear of being targeted by future penalties in the United States, where the firm has been subject to sanctions since 2014.
By taking management over a Russian company, Italy is following the example of Germany. In September, Berlin took control of the assets of Russian state-owned oil giant Rosneft, which ran a number of refineries in the country.
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