Italy secures U.S. ensures to unlock funding for Lukoil refinery

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ROME — U.S. authorities have reassured Italy that its banks are usually not liable to fines for breaching sanctions in opposition to Moscow if they assist a Lukoil-owned refinery purchase non-Russian oil, Italian Business Minister Adolfo Urso stated on Saturday.

The reassurance ought to assist the Sicily-based ISAB plant, which the federal government could put within the fingers of trustees, stay afloat after an EU embargo on seaborne Russian oil kicks in on Dec. 5, safeguarding native jobs and nationwide gas provides.

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“We obtained a letter from U.S. authorities with ensures that banks funding bridging transactions [to support ISAB] won’t be topic to U.S. sanctions,” Urso instructed reporters on the sidelines of an occasion within the Sicilian metropolis of Catania.

The letter, seen by Reuters, is signed by the pinnacle of the Workplace of Overseas Belongings Management (OFAC) on the U.S. Treasury, and mentions a mortgage supplied by some Italian banks and state lender Cassa Depositi e Prestiti (CDP).

“The availability of a ‘bridging mortgage’ by Italian entities to ISAB wouldn’t contain prohibited actions below OFAC’s Russia-related sanctions authorities,” the letter stated.

Urso hailed it as “a historic step that may enable banks to function with absolute confidence,” including that financing could be backed by 100% ensures from the Treasury-owned credit score export company SACE and Sicily’s regional administration.

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Following Russia’s invasion of Ukraine, ISAB has been pressured to rely solely on Russian crude after creditor banks halted financing and stopped offering ensures wanted to purchase oil from various suppliers.

Lukoil just isn’t affected by sanctions in Europe, however banks had been nonetheless reluctant to take care of a Russia-related firm as they feared being focused by attainable future fines in america, the place the corporate has been topic to sectoral sanctions since 2014.

The Italian authorities adopted on Thursday a scheme permitting ISAB to be positioned below trusteeship, whereas Lukoil continues talks on promoting the asset. An identical transfer was taken by Germany when in September it took management of a refinery owned by Rosneft .

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Urso stated that state-controlled Italian power group Eni could possibly be requested to assist the trusteeship.

The federal government might name on “an oil firm that operates within the sector, and it’s apparent to everybody that this (firm) could possibly be Eni, and this may guarantee continuity of manufacturing,” he stated.

Requested whether or not the federal government might keep away from placing the refinery below trusteeship if financial institution financing is unlocked, the minister instructed Reuters he thought it could be “extra credible” to nonetheless proceed in such a route.

On Friday, the Lukoil division that owns ISAB stated the refinery might maintain going regardless of the looming Russian oil embargo, counting on uncooked supplies saved for the approaching months and future deliveries of oil from international locations apart from Russia. (Reporting by Giuseppe Fonte and Alvise Armellini, Modifying by Christina Fincher and Louise Heavens)



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