Home » Rome keeps watchful eye on strategic refinery sell-off

Rome keeps watchful eye on strategic refinery sell-off

Priolo ISAB refinery
The Lukoil-controlled plant in Priolo is not in Cypriot hands yet, as Goi Energy still has to clarify some details about its business ties. However, suspicions over its possible Russian links seem to be subsiding

ISAB status update. The government is still keeping a close eye on the Russia-controlled refinery in the Sicilian town of Priolo, which supplies almost a quarter of Italy’s petrol needs. After placing it under a temporary trusteeship to keep it operational after the EU-wide petrol embargo hit in early December, Rome is now overseeing its sell-off.

  • The ISAB refinery is owned by Litasco, a Swiss company controlled by the Russia State-affiliated Lukoil. It has agreed to sell the operations to Goi Energy, a branch of Argus New Energy Fund, a private equity and asset management fund from Cyprus.

Missing deadlines. The closing of that agreement was set for Thursday. That, however, has slipped, as the Golden Power committee – which has to carry out the preliminary investigation for the government’s go-ahead – wants to know more. The latest request is for Goi Energy to clarify, by April 4, what role Trafigura would play.

  • That’s one of the world’s largest traders in oil and petroleum products, which has a standing deal with Goi to ensure a secure supply of oil to the refinery, as well as support working capital requirements.
  • The government wants to have more assurances on Trafigura’s commitments and on the effects that could result from its ties with Bazan Group, which owns a large refinery in Israel, potentially competing with the Sicilian operation.

Waning Russian fears. Over the past weeks, Goi had to address concerns over its links with Russia. Still, the relevant Italian ministries saw no worrying evidence on the matter, although some geopolitical concerns have been picked up by diplomatic circles in reference to Cyprus, which has long been a destination for substantial Russian investments.

  • Government sources assured Il Sole 24 Ore that the Golden Power verdict would not be based on these Russian suspicions, as they are about ISAB’s future sustainability.
  • Still, in the absence of convincing reassurances by April 4, “the exercise of special powers in the form of a veto on the operation is not ruled out,” reads the paper.
  • At that point, new candidates would come into play – such as the United States-based Crossbridge fund, which has been eyeing the Priolo operation from the get-go.

A statement from Goi Energy. The company told Decode39 it “categorically denies this articles contents and “clarifies that neither the company nor its CEO, Michael Bobrov, nor its shareholders (direct and indirect) and board members have any kind of connection with Russian Federation, Russian companies, Russian institutions and other entities that are in any way related to Russia. Goi Energy is a solid and fast-growing company, whose investor mix consists exclusively of Greek, Israeli and Cypriot business interests with long experience in the energy sector.

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