Page 13 - FSUOGM Week 38 2022

FSUOGM INVESTMENT FSUOGM

US private equity firm in talks to buy

Russian-owned plant in Italy

ITALY A US equity firm is first in line vying to acquire a refining interests in its territory, including the
Lukoil-owned refinery in Sicily, as Italy’s govern- Schwedt oil refinery, under state trusteeship. An
Crossbridge Energy ment weighs up alternatives to outright national- energy law amendment in August would allow
Partners undertook isation of the plant, the Financial Times reported the government to nationalise the facility com-
due diligence on the on September 20. pletely if it deems the move necessary.
purchase for 12 days Crossbridge Energy Partners undertook Italy has been reluctant to consider nation-
this month. due diligence on the purchase of Lukoil’s ISAB alisation, with its Energy Transition Minister
refinery for 12 days this month, sources told the Roberto Cingolani stating last week that “the
newspaper. An affiliate of Postlane Capital Part- best thing would be a takeover by a non-Russian
ners, the company acquired an ageing refinery in international counterparty.” But Italy is in polit-
Denmark from Shell last year. ical deadlock, and the new government after the
The EU is set to introduce a full embargo country’s election on September 25 could pursue
on seaborne Russian oil exports in early a different policy.
December, meaning the Sicilian refinery will According to the FT, global oil trader Vitol
lose access to the shipments it relies on from has also discussed the plant’s future with Italian
Lukoil. If sold to non-Russian owners, the authorities, and Equinor expressed a prelimi-
plant would be able to obtain alternative sup- nary interest in taking it over. Businesses were
plies. With a throughput capacity of 320,000 reluctant to enter into direct talks with a Russian
barrels per day, the plant provides over a fifth counterparty because of the risk of reputational
of the fuel consumed in Italy. damage, the newspaper reported, and so they
As Italy seeks to avoid the nationalisation wanted the Italian government to act as an inter-
option, Germany this week placed all Rosneft’s mediary. ™

PERFORMANCE

Russian oil and gas revenues dip in August

RUSSIA RUSSIA’S earnings from energy exports worth much less in the Russian currency than
slumped to a 14-month low in August, as the they were in March.
Revenues will be country continues discounting its oil supplies to Oil and gas revenues have contributed nearly
cut further if the EU Asia that it has diverted away from Europe. half of the Russian budget revenues received so
embago on Russian oil The country’s energy income amounted to far this year, and were down 18% year on year in
is adhered to, and if RUB672bn last month, or $11.1bn, marking the the first seven months of this year.
Gazprom cuts gas flow lowest volume since June 2021, according to the According to the Financial Times, Russia’s
to Europe further. Russian finance ministry. The income fell 13% budget surplus for 2022 has drastically shrunk
from July, and was down 3.4% from a year ear- as a result of the drop in energy exports in
lier. The decline came despite a 10% climb in the August, which caused a deficit of RUB360bn
price of Russia’s Urals oil benchmark, as Russian that month alone. Russia recorded a surplus of
exporters have had to sell their crude at signifi- nearly RUB500bn in the first seven months of
cant discounts to market prices to buyers in Asia, the year, but the cumulative total dropped to
as volumes are increasingly rejected by European only RUB137bn when including last month.
buyers. Over the first six months of the year, the surplus
Another factor has been cuts in Russian gas was estimated at RUB1.37 trillion.
supply over recent months. The Nord Stream Russian oil and gas export revenues could
1 pipeline was closed indefinitely at the end of wane further as the EU prepares to enforce its
August, with Gazprom citing technical problems embargo on most Russian oil imports in Decem-
caused by sanctions, and European leaders dis- ber this year.
missing the move as politically motivated. Russia’s economy shrank 4.3% in July versus
The significant recovery in the value of the the same month last year, according to the coun-
Russian ruble has also contributed to the slump try’s economy ministry. Russian brokerage Aton
in revenues, as the euros and dollars that are gen- is predicting a further contraction of 5% in 2023,
erated from oil and gas sales overseas are now as a result of declining energy production. ™

Week 38 23•September•2022 www. NEWSBASE .com P13