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Everything is under Italy's control

02 December 2022

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the Kommersant FM radio station on the consequences of introducing a temporary administration at the LUKOIL refinery in Italy.

The Italian authorities will take control of LUKOIL's subsidiary in Sicily. The Council of Ministers of the country approved a decree on the protection of strategically important enterprises. Thus, the authorities intend to prevent the closure of the local ISAB refinery, which belongs to a Russian company, foreign media write. The enterprise will be managed by a temporary administration.

At the same time, in the future, the nationalization of the enterprise is almost inevitable, Alexey Belogoryev says. It is possible that this will happen as early as next year, he says:

“The most likely scenario is nationalization in the future. At least that's the way Germany went. Countries with large Russian oil and gas assets can do this, but this is unlikely to happen in the next month or two. As for LUKOIL, in any case, it will not be able to supply Russian oil to the plant from December 5.

It is not entirely clear why the company could not independently provide the enterprise with supplies from other countries. It must have meant to do it. Here the explanation of Italian politics is very contradictory. If we talk about the manufacture of petroleum products, I think that with a stable supply of raw materials, nothing will change much, that is, production volumes will remain the same”.

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