Italy Seeks US Help To Save Lukoil Refinery

Italy is trying to get US authorities to reassure Italian banks they are not at risk of fines for breaching sanctions against Moscow if they help the Lukoil-owned ISAB refinery buy non-Russian oil, sources told Reuters.

• The survival of the ISAB plant in Sicily is under threat due to a European embargo on seaborne Russian oil coming into effect on 5 Dec. Its creditor banks have been wary of dealing with a Russian entity because Lukoil is affected by international sanctions in the US, but not in Europe.
• The Italian government is trying to overcome the banks’ resistance to providing finance to keep the plant going. The government does not rule out stepping in directly to keep the plant in business, though it will first make a last attempt to broker a deal with the banks.
• For the time being, the government is trying to get a 'comfort letter' from US authorities with reassurances in writing that the banks would not risk future fines, the sources said. So far there has been no positive response to Italy's request.
• The banks have also requested guarantees of up to 100% on the loans from state-owned credit export agency SACE - which would normally provide an 80% guarantee on similar transactions.
• A meeting with key government officials, SACE and the lenders is expected to take place on Wednesday.
• On Thursday, the government will hold a cabinet meeting to discuss a potential nationalisation of the ISAB refinery or other steps to secure operations.