Delays unclear over Cypriot-fueled Lukoil deal

An executive power committee in Italy has missed an initial deadline for approving the sale of a Russian refinery plant to an Israeli-backed Cypriot fund, with reports in the media getting blurred between fears over Russian influence and high-stakes geopolitical interests across the pond.

(Click here for an update to the story)

A Golden Power executive committee in Rome is still investigating the sale of a Lukoil-owned refinery to Cypriot private equity firm GOI Energy, an Israeli-interest subsidiary of Cypriot-based Argus fund, even a week after a deadline was missed to okay the deal.

Knews reported two weeks ago that Italy's cabinet was expected to decide whether to use "golden power" laws to halt the sale, citing reports that the deal was hanging in the balance as the Cabinet sought clarifications from GOI Energy.

But no decision has been made as the Cypriot company’s role in the deal has been a tough sell in Rome over fears of Russian influence on the island.

Russian fears and geopolitical games 

GOI Energy insists that neither the company nor its CEO Michael Bobrov, who also leads a big company in Israel, had connections to Russia, while reassurances have also been given about securing local jobs.

Back in January, Italian media reported extensively on a possible nationalization or even closure of the Isab di Priolo refinery plant but another scenario emerged at the last minute when the Cypriot company upped a previous offer by American interests.

This week according to Decode39, an Italian energy and geopolitics blogger, suspicions over possible Russian links in Cyprus seemed to be subsiding.

But there has been little reporting on the developments except that Rome was still asking to know more about Singapore-based Trafigura, one of the world’s largest oil traders tasked by the Cypriot company to carry out the deal.

“The government wants to have more assurances on Trafigura’s commitments and on the effects that could result from its ties with Bazan Group, which owns a large refinery in Israel, potentially competing with the Sicilian operation,” Decode39 said.

Trafigura was one of the main traders of Russian crude oil and refined products, but the company quickly distanced itself from Moscow after the war in Ukraine.

But according to the analyst, the delay could also mean that new suitors could come into play, including “United States-based Crossbridge fund, which has been eyeing the Priolo operation from the get-go.”

Meloni has used golden power once, next decision crucial

Italian Prime Minister Georgia Meloni has used the golden power veto for the first time when she blocked last month a takeover deal by a cloud services provider over links with Russian internet giant Yandex. According to media speculation, Meloni’s next key decision was expected to be about the Lukoil plant.

Media outlets have also reported on American concerns over the Cypriot deal, ranging from Russian suspicions to physical proximity to a NATO base in Sigonella.

GOI Energy had until Tuesday this week to clarify Trafigura’s role before the Italian government could make a decision, while the agreement had called for closing the deal by late March.

According to Italian news website Il Sole 24 Ore, it was still not clear whether convincing reassurances were given this week or whether the Cabinet plans to scrap the deal and start from scratch.