SOCAR Sets Sights on an Italian Refinery

The State Oil Company of Azerbaijan (SOCAR) has set its sights on acquiring an oil refinery in Italy, valued at $3 billion.

However, according to Reuters, the Italian government has set a condition: it will only agree to the deal if the Azerbaijani side provides long-term guarantees of oil supplies to the plant and a commitment to preserving jobs. According to two sources for the agency, this demand is addressed to both the government of Azerbaijan and SOCAR.

A tender for the sale of the refinery, which belongs to the IP (Italiana Petroli) company controlled by the Brachetti-Peretti family, was announced some time ago. SOCAR is participating in the tender through its subsidiary, SOCAR Trading. The main competitors of the Azerbaijani company are the Swiss traders Gunvor Trading and Glencore, as well as the Bin Butti investment company from the United Arab Emirates.

The Brachetti-Peretti family is being advised on the deal by UniCredit, while SOCAR is being advised by Intesa Sanpaolo IMI CIB. Earlier, the Intesa Sanpaolo bank, one of Italy's largest financial institutions, expressed its readiness to provide SOCAR Trading with a loan to acquire the plant.

Reuters was unable to get comments from the government of Azerbaijan, SOCAR, or the IP company regarding the conditions set by the Italian side.

It is noted that Rome and Baku maintain good diplomatic relations, and Azerbaijan is an important gas supplier for Italy via the Trans-Adriatic Pipeline.

Earlier this year, the Azerbaijani Baku Steel Company expressed interest in Italy's largest steel company, Acciaierie d'Italia. However, the parties failed to conclude a full-fledged deal, which forced the Italian government to restart the tender process.