(Bloomberg) -- Italy’s largest refinery, which is owned by Russia’s Lukoil PJSC, is not destined for nationalization, according to Industry Minister Adolfo Urso.
The Italian government paved the way for putting strategic oil and gas infrastructure under temporary administration Thursday, in a move which set the stage for a temporary state takeover of the ISAB Lukoil refinery in Priolo, Sicily, which has been struggling to secure funding ahead of a European Union ban on Russian oil due to kick in on Dec. 5.
Asked whether the plant was headed for nationalization, Urso told newspaper Corriere della Sera on Saturday: “Absolutely not.”
The government is taking on temporary administration of the refinery with the option of entrusting management to publicly-controlled companies operating in the same sector “to guarantee the continuity of production and therefore the energy supply of the country, also safeguarding employment,” Urso said.
In the meantime, Urso added, the ownership of the refinery can continue talks for ceding it to others.
Italian energy giant Eni Spa could become involved, “and this will give a guarantee of production continuity,” newswire Ansa cited Urso as telling reporters in Sicily on Saturday. Urso also said he had received a US guarantee on Saturday morning that banks which will finance bridge operations will not be subjected to US sanctions.
The urgent law approved by Prime Minister Giorgia Meloni’s cabinet Thursday gives the government the power to put power stations, pipelines and other energy plants under temporary administration for up to two years, according to a statement. The law is aimed to “defend the national interest on strategic production sectors,” according to a statement.
Italian banks had been wary that extending credit to ISAB would incur secondary sanctions in the US that would restrict access to dollars, Bloomberg reported in November. The refinery is one of Europe’s biggest oil-processing complexes, with a combined capacity of well over 300,000 barrels a day, according to data compiled by Bloomberg.
(Updates with more Urso remarks in seventh pararaph)
©2022 Bloomberg L.P.
Advertisement