American private equity fund Crossbridge Energy Partners is the main contender to buy Lukoil’s oil refinery located in Sicily.
Representatives of the fund have been inspecting the company over the past 12 days, according to three people familiar with the situation.
The Lukoil ISAB plant was also interested in the largest independent oil trader Vitol, which recently discussed its fate with the Italian authorities. Vitol was also in talks with Crossbridge about the possibility of jointly purchasing a refinery, people directly familiar with this matter said. Crossbridge now prefers to bet on going it alone, one of them said.
Norwegian oil and gas company Equinor has also expressed interest in the plant, two people familiar with the discussions said.
All potential bidders, like ISAB, declined to comment. According to local media reports, Rustem Gimaletdinov, Lukoil’s vice president for oil refining, petrochemicals and gas processing, visited the refinery this week and told workers (there are more than 1,000 of them at the plant) that there are no plans for a sale.
Litasco, Lukoil’s trading arm in Switzerland, acquired ISAB in 2008. This year, the refinery lost the ability to buy oil from suppliers other than Lukoil itself, as banks began to refuse financing after Western countries imposed sanctions against Russia. When the embargo on the purchase of Russian oil comes into force in December, the refinery will no longer be able to receive it from the parent company.
Italy’s Energy Transition Minister Roberto Cingolani said last week that “the best solution would be to buy [завода] non-Russian international company.” In this case, the refinery, which produces 22% of motor fuels in Italy, would be able to purchase raw materials in other countries.
Western companies are reluctant to negotiate directly with Lukoil because of the potential damage to their reputations and would prefer the Italian government to act as a mediator, the sources said. It, in turn, refused to resort to nationalization, as was actually done by the German authorities, who last week introduced external management in the German subsidiaries of Rosneft, which owned shares in three refineries.
However, the situation may change after the formation of a new government following the results of the elections, which will take place on Sunday.