Italy could nationalize Lukoil refinery

Milan: Italy is considering temporary nationalisation of Lukoil-owned refinery ISAB as one of its options if sanctions are imposed on Russian oil, government sources said.

Industry Minister Giancarlo Giorgetti plans to raise the nationalisation of ISAB as an option when the Italian cabinet meets on Thursday, one of the sources said.

Giorgetti’s office said nationalization of the ISAB refinery was not currently on the agenda although there was “concern about the social implications for the area” and the situation was being examined by the ministry.

With Europe heavily reliant on Russian oil and gas imports, the continent remains divided on the issue of a ban. Ukraine, Poland and Lithuania are among states in favour of a ban on Russian oil and gas imports, while Germany and Hungary are opposed to an immediate embargo.

ISAB, which is Italy’s biggest oil refinery by capacity, used to buy 30-40% of its feedstock from Russia, with the rest coming from international markets.

But one of the effects of Russia’s invasion of Ukraine is that ISAB has been forced to source nearly all of its crude oil from Russian owner Lukoil (LKOH.MM) because international banks are no longer providing it with credit.

“Since we don’t have credit at the international level we can’t buy crude from elsewhere,” ISAB Deputy General Manager Claudio Geraci said.