How To Destroy Oil Company And Live Happily. Italian Way To Impose Sanctions On Russia

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Written by Piero Messina

If someone had in mind to write a manual on how to manipulate public opinion, he would have to tell the story of the Priolo petrochemical plant, south of Sicily. It is the fifth refinery in Europe and supplies 25 percent of Italy’s needs.

Those plants were built between the end of the sixties and the following decade. They have passed from ownership to ownership, also due to corruption scandals that involved the management of the plant many years ago. Since 2008, at the entrance to the plant there is the sign with the stylized “L” of Lukoil. The arrival of the Russian company was hailed at the time as the beginning of a new era of prosperity for the industrial sector. In a land like Sicily which boasts the European unemployment record, Lukoil’s rubles were the best “gasoline” to support the economy of one of the poorest areas of already poor Italy.

Since the beginning of the conflict between Russia and Ukraine, the Lukoil plant has come under the scrutiny of politics and the world of information. Of course, US pressure to sanction that industry too was felt strongly. Sicily is a strategic military platform for NATO and US military forces. Even needless to mention it. The Russian presence a few kilometers from naval and air bases had to be compressed and possibly cancelled.

Until 5 December, the oil refined in Sicily by Lukoil was exempt from any embargo. Because, precisely because of the processing done in Sicily, that crude oil from Russia magically became “made in Italy”. It is the global world.

The Wall Street Journal took care of unleashing the spark. The New York stock exchange newspaper branded the Lukoil plant in Priolo as the great “device” created by Russia to circumvent the sanctions on petroleum products.

In the reconstruction of the WSJ it was explained that the American sanctions provide for an exclusion for crude oil “substantially transformed into a product made abroad”, adding that once transformed in the Priolo refinery, Russian oil becomes an “Italian product” and is introduced into the plants of Exxon in Texas or in New Jersey in those of Lukoil, which in the USA has 230 service stations in 11 states (but mostly owned by individual American franchises). Before the sanctions, the Priolo refinery processed crude oil from various countries.

The news slammed into the front page causes chaos to explode. Without Russian oil, the plant closes, the media write, without ever contacting the company’s management. The banks are refusing to give credit to the Sicily-based company. A stop at the Priolo plant would be a catastrophe for the Sicilian economy. Thus, the unions took to the streets to defend the tens of thousands of jobs guaranteed by Lukoil. We ask for the intervention of the Italian government, we ask for a solution.

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And in the end the far-right government makes a decision. For the next six months, the Lukoil plant will be administered by the Italian state. It is a mechanism called “golden share” that allows it.

They all breathed a sigh of relief. Politicians who have shown their toughness against everything Russian, trade unions and workers who are no longer conditioned by the specter of “Putin’s war”.

Nino Amadore, a journalist from Sole24ore, is not satisfied with the official version. He thinks it’s worth hearing about Russian ownership as well.

Thus it turns out that Lukoil’s management was quietly planning its business, sourcing crude oil from Saudi Arabia. The Priolo plant was absolutely not in crisis and did not risk being stopped. But there is more. Eugene Maniakhine, (general manager of the plant and CEO of the company) explained that the plant is for sale. The intervention of the Italian government, therefore, only cause damage to the sale procedure initiated by Lukoil (which controls the ownership of the plant through the Swiss company Litasco). It thus turns out that the Lukoil management was quietly planning its business, sourcing supplies of crude oil from Saudi Arabia. The Priolo plant was absolutely not in crisis and did not risk being stopped. But there is more. Eugene Maniakhine, (general manager of the plant and CEO of the company) explained that the plant is for sale. The intervention of the Italian government, therefore, only cause damage to the sale procedure initiated by Lukoil (which controls the ownership of the plant through the Swiss company Litasco).

Furthermore, Maniakhine explains that he is in a position to go ahead without problems: “Isab is an efficient and successful company but this was not an easy result to obtain. It’s no secret that the refinery has been loss making for years and needed significant investment. Lukoil bought the refinery in 2008 and we have made total investments since then of around six billion for the purchase, for development projects and for maintaining processing capacity. Six billion invested in the Italian economy. We have improved the structure, the product quality of the refinery and increased the industrial safety and improved the environmental impact of the company. I would like to underline that we have developed the plant continuously, taking into account all the trends and challenges of the sector, including the climate agenda”.

Maniakhine contests the Italian government’s decision to “appropriate” the plant. “We do not consider it fair or useful. This decision could contribute to the closure of the plant and create obstacles for the sale to the new owner”. In short, dear Italians, we have invested in your territory and if this is your sense of gratitude, goodbye, Do svidaniya.

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