Lukoil Sells Italian Refinery To Trafigura-Backed Firm

Lukoil, the second largest oil and gas company in Russia after Gazprom, has sold the ISAB company to a Cyprus-based company backed by Trafigura.

This is Lukoil’s first major sale since Russia invaded Ukraine and since the West put sanctions on Russian companies.

Namely, Lukoil’s wholly-owned subsidiary Litasco sold the ISAB refinery to Cypriot firm G.O.I. Energy, a Trafigura-backed private equity firm.

Lukoil said that the transaction was planned to be completed by the end of March 2023 upon fulfillment of certain conditions precedent including receipt of necessary approvals of competent authorities, particularly the Italian Government. That means that the deal would let Trafigura handle oil supplies for the Italian refinery.

ISAB owns a large petrochemical complex in Italy combining refining, gasification, and electricity cogeneration plants.

Lukoil noted that G.O.I. Energy formed a partnership with Trafigura, one of the world's largest international traders of oil and petroleum products, which secures uninterrupted feedstock supplies to the refinery and provides for production offtake as well as necessary working capital level. It is worth noting that the new owner of ISAB will retain jobs and ensure health and safety conditions.

G.O.I. Energy is an energy sector arm of Argus New Energy Fund with expertise in all asset classes. The company represents a partnership of leading experts with long experience in oil refining, oil trading, and refinery financial restructuring.

The investors of G.O.I. Energy own a majority stake in Bazan Group, one of the largest energy groups in Israel operating the country’s largest integrated refining and petrochemical facility. G.O.I Energy is run by Israeli Green Oil CEO Michael Bobrov.

ISAB is by no means a small asset. It refines around one-fifth of Italy’s crude oil and, as of December 5, in line with the EU ban on Russian seaborne crude, can no longer import Russian oil.

According to reports by Reuters, the Italian government said it was considering direct state intervention to keep the refinery running after December 5 since ISAB was forced to rely fully on Russian oil because banks halted financing and guarantees for other oil purchases.

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