Italy to nationalize key refinery involved in Russian oil sanctions evasion scheme

News outlet La Repubblica informed on the situation.

"The Italian government is working on nationalizing the ISAB oil refinery, which belongs to the Russian oil company Lukoil and is located on the island of Sicily. The meeting to discuss this proposal will be held on Thursday, December 1," the statement reads.

The outlet writes that Italy intends to take such a step due to new EU sanctions against Russia that come into force on December 5 and put an embargo on the import of Russian oil. The Lukoil plant in Sicily processes Urals oil.

Citing its own sources, La Repubblica reports that the authorities have recognized state intervention as the only possible solution to save the plant. More than 10,000 employees work at the enterprise.

In case the plant is nationalized, the company will be able to purchase oil from other suppliers.

"Using last reserves and slowing down the production on the Priolo plant, which covers more than 20% of the demand for petroleum products throughout Italy, the plant will be able to operate until January. The operation will also be possible due to the 2 cargoes of non-Russian origin that Lukoil managed to deliver to Priolo without accessing "guarantees of Italian banks, which have been reducing oil refinery funds for months in fear of being sanctioned. On the other hand, with the involvement of the state, the banks could be sure of being released from any responsibility," the news outlet wrote.