Italy’s ERG and Russia’s LUKoil form refining JV
Russian oil major LUKoil and Italian refiner ERG SpA have formed a refining joint venture, with LUKoil taking a 49% stake in ERG’s main plant for €1.347 billion ($2.09 billion), ERG said on Tuesday.
Under the joint venture, LUKoil and ERG have formed a new company worth €2.75 billion that will control ERG’s Isab di Priolo refinery in Sicily, ERG said in a statement. ERG will have 51% of the joint venture. The 320,000 barrels-a-day refinery includes a 99-megawatt power plant and a minimum inventory of 745,000 tons of crude oil and refined products. ERG is Italy’s second-biggest refiner by market share.
“This important joint venture is in line with our strategy of growth characterized by ... accords with first-tier international partners that have always represented opportunity for development of our group,” CEO Alessandro Garrone said in a statement. Governance will be shared equally between LUKoil and ERG on major business decisions. An operating accord will guarantee management efficiency and autonomy, it said.
LUKoil and ERG have agreed to develop Isab in coming years in line with ERG’s business plan. ERG will have an option to sell its 51% stake to LUKoil within five years. Garrone said the put option was an instrument to resolve disagreements and there was no intention to exercise the option. (Reuters)
ADVERTISEMENT
Mapei Targets 6% Higher Revenue This Year
Parliament Negates Mandatory Membership in MOK
Number of Residential Developments in Cities Falls 9%
Veronika Spanarova Wins Expat CEO of the Year Award 2023
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
