Italy wants to get rid of the Lukoil refinery in

The Italian Minister of Energy, Roberto Cingolani, expressed his hope that the Lukoil refinery in Sicily will be bought by a foreign investor, reports Reuters.

The sanctions imposed by the European Union on Russian crude oil imports are severely affecting the refinery, responsible for approximately 20% of Italy’s refining capacity.

“It is an extremely delicate situation, the best thing would be an international acquisition,” Cingolani told journalists.

The ISAB refinery, where approximately 1,000 employees work, is owned by the Swiss trading company Litasco SA, which sells 89% of the refinery’s production. In turn, Litasco is controlled by the Lukoil group.

The Italians announced in late April that they were considering the temporary nationalization of Lukoil-owned ISAB refinery as one of its options if sanctions were imposed on Russian oil.

Before the COVID-19 pandemic, the ISAB refinery produced 10.6 million tons of refined products per year, 13% of Italy’s total production.

Also facing problems is Enel SpA, which, according to the CEO of the Italian utility company, Francesco Starace, has no indication of when it can complete the sale of its Russian subsidiary.

“Lukoil submitted the request … and we are waiting for the answer”, said the businessman.

In June, Enel announced that it had reached an agreement with Lukoil and the Gazprombank-Frezia investment fund regarding the sale of a 56.43% stake in Enel Russia, for approximately 137 million euros. Enel’s Russian subsidiary is on a preliminary list of companies that investors from so-called unfriendly countries cannot sell this year, unless they obtain special permission.

Subsequently, the authorities in Moscow introduced new requirements, requiring that the potential buyer also request authorization for the acquisition of the assets. Enel has two wind farms and three gas-fired power plants in Russia, and in March announced it was exploring options for these assets after the invasion of Ukraine.

The complicated situation at Lukoil

As for the situation at Lukoil, things are also delicate there, especially after the chairman of the board of directors of the Russian private oil company, Ravil Maganov, died after falling from the window of the Central Clinical Hospital in Moscow, where he was interned.

“Maganov fell from the window of his room in the Central Clinical Hospital this morning. He died from his injuries,” an anonymous source told Interfax.

Maganov, aged 67, was hospitalized after suffering a heart attack and was taking antidepressants, according to the same sources. The Lukoil company released a statement in which it announced that the chairman of the board of directors of the Russian oil group died after “a long illness”, without providing any other details.

Maganov has worked at Lukoil since 1993, holding various management positions. He was executive vice president and oversaw exploration and production. In 2020, Lukoil’s board of directors appointed Maganov as chairman to replace Valeri Greifer, who died in April of that year.

Maganov was one of the historical leaders of the Lukoil group, established in November 1991. According to the Lukoil press release, Maganov is the one who imagined and proposed the name of the company. With or without connection to the businessman’s death, Lukoil was one of the few Russian companies to call for an end to Moscow’s offensive in Ukraine, which was followed by an avalanche of Western sanctions against major Russian groups and senior officials.

At the end of April, billionaire Vaghit Alekperov, then chairman of the group, resigned a week after being placed on the list of Russian personalities sanctioned by the United Kingdom.