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Friday, June 27, 2008

LUKOIL Buys into Italian Refinery

June 25, 2008 - Kommersant - LUKOIL has purchased 49 percent of the Italian ISAB oil refinery for €1.347 billion (about $2.1 billion) and may raise its share to 100 percent within the next five years. It is the first refinery in Western Europe to be owned by a Russian company and it increases LUKOIL’s capacity in Europe by 71 percent and its total capacity by 13 percent. It has been ten years since LUKOIL last bought a refinery in Eastern Europe, although it has made many unsuccessful attempts to buy refineries. LUKOIL owns two refineries in Europe, at Burgas, Bulgaria, where the capacity is 8.8 tons of oil per year, and in Ploiesti, Romania, where the capacity is 2.4 million tons of oil. LUKOIL president signed an agreement yesterday in Rome forming a joint enterprise with Alessandro Garrone, head of ERG S.p.A., which owns the other 51 percent of the refinery. The ISAB refinery is located in Priolo Gargallo, Sicily. The complex consists of two refineries, which produce kerosene and diesel fuel. It has three sea terminals, storage facilities, a generating plant and other infrastructure. It processes 16 tons of oil per year. LUKOIL is developing a retail network in Europe. At the end of 2007, there were 2200 filling stations operating under the company’s brand name. “Our acquisitions in Croatia, Macedonia and Montenegro will help the development of the company in that region,” LUKOIL vice president Leonid Fedun said. “We own more than 150 stations in that region, and our plans are expand the number of stations by three or four times in the coming years.”

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