Russia's Lukoil completes sale of oil refinery in Italy

Russia's second-largest oil producer Lukoil (LKOH.MM) said on Thursday its subsidiary LITASCO had completed the sale of the ISAB oil refinery in Sicily to Cypriot private equity firm G.O.I. Energy following approval by Italian authorities.

It did not disclose financial details.

G.O.I. energy said in a statement it aims to turn the refinery into "one of Europe's main energy hubs" through synergies with industrial partners, including commodities trader Trafigura.

"ISAB and Trafigura ... signed long-term commercial agreements that will ensure continuity in the supply of raw materials and the purchase of finished products. Trafigura will play a key role in ensuring the full operation of the refinery in the future," the statement said.

The ISAB plant in Sicily refines 320,000 barrels per day of crude, accounting for a fifth of Italy's refining capacity. It directly employs about 1,000 people in the economically depressed southernmost region of Italy.

Lukoil said in January it had reached a preliminary deal to sell the refinery to G.O.I Energy, paving the way for its first significant asset disposal since the Ukraine invasion began in February last year.

Although Lukoil has not directly been targeted by Western sanctions on Russia, the ISAB refinery was affected by an embargo on Moscow's crude as banks were reluctant to finance procurement for a Russia-related company.

The Italian government eventually gave conditional approval to the deal, after a close consideration of "Golden Power" regulations that are designed to protect industries deemed of strategic importance.

"The acquisition of ISAB by GOI represents a milestone, as it marks the beginning of a new era for the refinery," G.O.I CEO Michael Bobrov said.