General view of the ISAB plant, the Lukoil-owned oil refinery in Sicily, which is likely to be affected by the embargo on Russian seaborne oil that goes into effect in December, in Priolo, Italy
MILAN, Dec 8 (Reuters) – Russia’s Lukoil (LKOH.MM) and U.S. private equity firm Crossbridge are close to a deal for the sale of the Russian group’s refinery in Sicily, Italy, three sources with knowledge of the matter said on Thursday.
The agreement between Lukoil and Crossbridge, which is supported by Swiss commodity trader Vitol, could be worth just under 1.5 billion euros ($1.58 billion), two of the sources said, cautioning that final terms of the transaction could still change.
The Lukoil-owned site in Sicily refines a fifth of Italy’s crude and directly employs about 1,000 people in an economically depressed area.
The refinery, which has relied on mainly Russian crude in recent months, is now unable to take its mainstay feedstock after a European Union embargo came into force on Monday.
Last week, Rome laid down a scheme to place the plant in the hands of trustees to protect jobs and domestic refinery capacity from the embargo. read more
The possibility that the refinery may end up under a trusteeship has accelerated negotiations between Lukoil and Crossbridge, one of the sources said. read more
According to a fourth source, the refinery’s revenues are projected to more than triple this year, surpassing 10 billion euros ($10.55 billion) on the back of higher prices for diesel and gasoline.
Any agreement to sell the plant will be subject to government scrutiny under the so-called golden power regulation, which gives Rome the possibility to block the transaction should it harm jobs or strategic production in the country.
Crossbridge and Vitol declined to comment. Lukoil was not immediately available to comment. Italy’s industry ministry did not reply to a request for comment.