Lukoil, how the administration of the Priolo refinery will work

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Here comes the commissioner for the Isab of Priolo which risks closure due to the embargo on Russian oil. The law decree which provides for the trusteeship of the Sicilian refineries indirectly owned by the Russian Lukoil was approved on Thursday 1 December by the council of ministers with the title “urgent measures to protect the national interest in strategic production sectors”. It is not a nationalization but a temporary management of the State, borrowed from a German law, which should last the time necessary to identify a buyer (there is still talk of the US Crossbridge Energy fund). At most two years, says the decree.

The hypothesis of a former Ilva-saving rule was also mooted on Thursday, to specify that the 1 billion dowry set by the aid decree bis is necessarily usable by the public shareholder – Invitalia – for the capital increase and not for mere financing. It would have been a measure to corner ArcelorMittal in view of the assembly of Acciaierie d’Italia scheduled for December 2, automatically opening the door to the ascent of the state in the majority. But the intervention, at least for the moment, would have been shelved or in any case postponed.

Objective: to ensure security of supply

Returning to Priolo, the Dl seems to incorporate in its main lines an amendment by the Sicilian senator Antonio Nicita (Pd) to the Dl Aiuti quater. Article 1 of the Legislative Decree mentions the energy emergency in the introduction and provides that companies that manage strategic refining plants must in every way guarantee the security of supplies. Until 30 June 2023, if there are risks of production continuity that impact on national security, “consequent to sanctions imposed in the context of international relations between States” (reference to Russia), the company must inform the Ministry of Enterprise and made in Italy (Mimit) and can request «temporary administration», which can however also be ordered ex officio. This particular form of extraordinary administration can last a maximum of 1 year, which can be extended for no more than a further 12 months.

What does temporary administration involve?

Temporary administration involves the replacement of the administrative bodies and the appointment of a commissioner who takes over the management. Any profits accrued during the year cannot be distributed until the end of the extraordinary regime and management costs remain the responsibility of the company. The commissioner, appointed by Mimit, can also make use of «publicly controlled companies operating in the same sector and without prejudice to the rules on competition». There seems to be a reference to Eni, whose role, however, should take into account the antitrust stakes. In recent days, however, Eni had specified that its economic-financial involvement was not on the table. For Prime Minister Giorgia Meloni, the measure “defends a strategic node for energy which, with related industries, employs around 10,000 people”.

How the «golden power» works

Article 2, on the other hand, concerns the legislation on the “golden power” in general and not the Isab case specifically. It is established that the companies involved in transactions subject to the exercise of special powers by the government can be compensated, with measures to support the capitalization of the company, against measures that inhibit the operation. This is the priority access to the Fund for the protection of employment levels and the continuation of the business activity managed by Invitalia, access to the funds of the Assets allocated by Cassa depositi e prestiti and, for the two years following the exercise of the golden power, also priority access to the Mimit incentives of development contracts and innovation agreements. Article 3 provides for entry into force on the day following its publication in the Official Gazette.