Italy's Ludoil buys Sicilian oil refiner as war hits Europe fuel supply
Ludoil's Acquisition of ISAB and Its Impact on the Italian Energy Sector
By Francesca Landini
Background of the Acquisition
MILAN, May 13 (Reuters) - Ludoil has agreed to buy Sicilian oil refiner ISAB from Cypriot private equity fund G.O.I. Energy, the Italian group said on Wednesday, as the Iran war has exposed Europe's dependency on the Gulf for supplies of jet fuel and other refined products.
Significance of the Transaction
"Through this transaction, an asset of vital national importance returns to Italian ownership," said Ludoil, which is a jet fuel supplier for Rome's Fiumicino airport.
Previous Refinery Sales in Italy
Italy's Morattis and Brachetti-Perettis families have in recent years sold their oil refineries to commodity trader Vitol and Azerbaijan's SOCAR respectively.
Details of the Deal
Negotiations and Timing
Ludoil was already in talks with G.O.I. Energy on ISAB when the United States and Israel struck Iran on February 28.
Financial and Strategic Implications
Ludoil, founded in 1954 by the grandfather of its current chairman and CEO Donato Ammaturo, said consolidated revenue will be above 10 billion euros ($11.7 billion), making the new entity Italy's leading privately held multi-energy company.
Transformation of ISAB
"The acquisition will see ISAB evolve from a traditional refinery into an energy company, underpinning competitiveness, security of supply and the development of new energy value chains," Ludoil added in a statement.
Ludoil's Expansion Plans
With a portfolio ranging from coastal storage terminals to a fuel retail network, Ludoil said it aimed to fully integrate ISAB and develop a biofuel business for the refiner.
Deal Structure and Government Oversight
The deal is structured in two stages, with the first seeing Ludoil acquire a 51% interest in ISAB, subject to several conditions including clearance from the Italian government under its so-called golden power regime.
Ludoil did not say how much it would pay for the stake and did not immediately respond to a request for further details.
ISAB's Strategic Importance and Future Operations
Role in Italy's Refining Capacity
ISAB is considered a strategic asset by the government as it accounts for more than 20% of Italy's refining capacity. G.O.I. Energy bought it from Russia's Lukoil in 2023.
Supply Agreements and Future Partnerships
Ludoil did not say whether an existing agreement with global trading house Trafigura for the supply of raw materials and the purchase of finished products would remain in place. A person familiar with the deal told Reuters that Trafigura will retain its supply and offtake contract with ISAB's Priolo refinery.
($1 = 0.8544 euros)
(Reporting by Francesca Landini; Additional reporting by Robert Harvey; Editing by Cristina Carlevaro and Alexander Smith)
