Lukoil's Italy refinery could be sold by end of year - manager

General view of the ISAB plant, the Lukoil-owned oil refinery in Sicily, Italy October 27, 2022. REUTERS/Antonio Parrinello/File Photo

ROME, Dec 5 (Reuters) - Russia's Lukoil (LKOH.MM) could sell its ISAB oil refinery in Sicily by the end of the year, the manager of the plant was quoted as saying in an interview on Monday.

The site, which has relied solely on Russian deliveries in recent months, is now affected by an EU embargo on seaborne Russian oil that entered into force on Monday.

Its director General Eugene Maniakhine also told the Il Sole 24 Ore website that the Italian government should not proceed with plans to put the plant under trusteeship.

"We are negotiating the sale," he said, when asked about reports of an interest from U.S. investment platform Crossbridge Energy Partners.

"There is the idea to sell. We think that the deal for the sale can be concluded in a short time ... Probably within this year," he added.

Maniakhine indicated that ISAB has enough reserves and contracts for non-Russian oil to keep going for "several months," and said there is no need for Italy to take it over.

Such a move would be "neither fair nor useful" and "could contribute to the closure of the plant and create obstacles for the sale to a new owner," he said.

Following Russia's invasion of Ukraine, ISAB has been forced to rely solely on Russian crude as banks halted financing and stopped providing guarantees needed to buy oil from elsewhere.

Lukoil is not affected by sanctions in Europe, but banks were still reluctant to deal with a Russia-related company as they feared being targeted by possible future fines in the United States, where the company has been subject to sectoral sanctions since 2014.

However, U.S. authorities have reassured Italy that its banks are not at risk of penalties for breaching sanctions if they help the refinery buy non-Russian oil, Italian Industry Minister Adolfo Urso said on Saturday.

Keeping the plant operational is a must for Italy, since it refines a fifth of the country's crude and its employs about 1,000 people in an economically depressed area.

Reporting by Alvise Armellini Editing by Keith Weir

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