Applicants are being sorted out for ISAB – Business – Kommersant

The Italian government is negotiating the sale of one of the largest oil refining assets in the country both with foreign companies, the most likely of which are the American Crossbridge Energy Partners and Qatari GSSG, and with national players. But market participants are confident that the choice will still be made towards a foreign investor who will be able to provide the plant with cheap oil and stable financing. However, investments in modernization, they note, will be offset by high margins, which the refinery received due to a significant increase in the price of petroleum products.

There are several domestic and international potential applicants for the LUKOIL ISAB plant (the company owns it through its trader Litasco) in Sicily, Adolfo Urso, the Minister for Enterprises and Products Made in Italy, said, according to the agency. Reuters. Since the beginning of December, the refinery, which has been in trouble because of the sixth round of sanctions that restricted seaborne imports of Russian oil, has been under state control. So the government is involved in negotiations with potential investors. The most likely of them on the market is the American Crossbridge Energy Partners, which has secured the support of a large oil trader Vitol.

Such a scheme, Kommersant’s sources on the market explain, is similar to the one used by LUKOIL itself. Its trader Litasco bought a significant part of the raw materials for the plant on the spot at the market price, so the processing margin will not change much in this case. They recall that LUKOIL itself bought the plant for about $2 billion, so a commensurate amount looks real, but with a discount of $300,000-500,000.

Moreover, Kommersant’s interlocutors say that now the successfully geographically located plant looks more attractive than ever against the backdrop of high prices for petroleum products in Europe and the USA and relatively low oil prices.

In addition, they remind that the plant has a large power unit IGCC (combined-cycle plant with gasification) for 500 MW, which uses oil residues from processing as a feedstock.

The second likely investor in the market is the Qatari fund GSSG, which, together with Italian investors, according to unofficial information, made an offer to purchase. Kommersant’s sources consider him an even more profitable contender, taking into account the possibility of supplying Middle Eastern oil to the plant, which will further increase the efficiency of refining. At the same time, they doubt that one of the European oil and gas companies or the national Eni, with which the option of temporary management of the plant is being discussed before its sale, can get a large share in the asset. According to Kommersant’s sources, Italy will prefer a foreign investor capable of financing the subsequent modernization of the plant.

LUKOIL itself does not comment on the situation. But earlier, ISAB CEO Evgeny Manyakhin noted that negotiations on its sale are at an advanced stage and could be completed before the end of the year.

Olga Mordyushenko