The situation is extremely difficult for energy companiesmany of whom are unable to service their debt, while others are being targeted by European governments due to war in Ukraine. According to a related report in the Italian newspaper La Repubblica, the Italian government is preparing to nationalize the oil refinery of the Russian oil company Lukoil in Sicily. In fact, this issue will be discussed tomorrow in the cabinet.
The move is linked to a European embargo on Russian offshore oil, due to take effect on December 5. The problem for the Italian government is that it is interested in keeping the ISAB refinery in Sicily open, while not wanting to jeopardize jobs or cut the country’s refinery capacity, Reuters reported. It is noted that Lukoil’s ISAB division in Sicily processes 1/5 of the crude oil produced in Italy and employs about 1,000 people. According to La Repubblica, if the Italian government takes over the operation of the refinery, the unit will be able to continue working by buying oil from other suppliers, and the Italian export credit agency SACE will provide the necessary guarantees to creditor banks.
Meanwhile, French energy group EDF, already heavily indebted, has taken out new loans worth 2.2 billion euros, maturing within three years. The move gives the French giant a bailout as cuts in nuclear power generation take a toll on its financial performance.
“This deal enhances the group’s financial flexibility for the coming years,” EDF said in a statement, adding that loans have been agreed with a group of six banks and will be paid in December 2022.
The French giant said in October that it expects a profit of around 32 billion euros this year due to a decline in nuclear power production – it was the company’s sixth warning of falling profitability this fiscal year.
EDF, which is in the process of being nationalized by the French government, lowered its 2022 nuclear power target again on November 3. The company attributed the decline to a delay in plant maintenance due to worker strikes and extended service outages at four reactors affected by corrosion.
Source: Kathimerini
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.