The recent reports about the State Oil Company of Azerbaijan (SOCAR) being on the verge of acquiring Italiana Petroli (IP), one of Italy’s most iconic energy companies, are more than just another corporate transaction. They signify a profound shift in the European energy landscape, one driven by geopolitics, economic pragmatism, and the changing dynamics of global energy markets.
According to Reuters, SOCAR is close to finalizing a deal that would give it control over two major oil refineries, an extensive logistics network, and 4,500 fuel stations across Italy, placing Azerbaijan squarely in the heart of Europe’s downstream energy sector. While the final agreement has not yet been publicly confirmed, sources suggest it could be signed any day now.
photo: Mobility Plaza
Founded over 90 years ago, Italiana Petroli is not simply a refining business; it represents a deeply rooted Italian legacy. In 2024 alone, the company processed nearly 15 million tons of oil products, generating revenues of €406 million. Interestingly, around 7% of IP’s crude purchases already came from Azerbaijan, signaling that the partnership between Baku and Rome has been quietly building for some time. Now, with SOCAR stepping in, this relationship could evolve into a full-scale strategic alliance.
The deal reportedly comes with significant conditions. Italy has requested that SOCAR guarantee annual supplies of 10 million tons of crude oil to the refineries while preserving the 16,000 jobs tied to the company. Additionally, SOCAR is expected to uphold strict environmental standards at all facilities. This is not only a business acquisition but a responsibility to maintain Italy’s energy security and economic stability.
Financial terms remain undisclosed, though earlier reports suggested that the Brachetti-Peretti family, the owners of IP, were seeking a valuation around $2.9 billion (€2.5 billion), with $500 million in cash upfront. Some sources believe the total value of the deal, including investments, could reach €3-3.5 billion. Such numbers underscore the sheer scale of this acquisition and the ambition behind SOCAR’s European strategy.
Yet, there are questions lingering in the background. Analysts, including those at Neftegaz.RU, have speculated about the reasons behind the Italian family’s decision to sell. Among the possible factors are the inability to legally source cheaper Russian crude due to EU sanctions, the rising costs of alternative oil grades, outdated infrastructure, and tax complexities that have eroded profitability. These challenges mirror the broader struggles of European refineries in the post-Ukraine war era.
photo: Cengiz Holding
SOCAR’s move into Italy also aligns with its broader expansion plans. Alongside Türkiye’s Cengiz Holding, SOCAR is bidding for Lukoil’s Burgas refinery in Bulgaria, the largest refinery in the Balkans. Like in Italy, geopolitical factors have shaped this opportunity. Since March 2024, Bulgaria has banned the import of Russian Urals crude and prohibited the export of products refined from Russian oil. SOCAR, already a key supplier of natural gas to Europe via the TANAP-TAP pipeline system, is perfectly positioned to fill this void.
This development comes at a time when Europe’s ambitious green transition faces reality checks. Despite a strong push toward renewable energy, recent events have highlighted its vulnerabilities. This summer, Europe’s wind farms underperformed due to unusually low wind levels, causing a shortfall that had to be compensated by more reliable energy sources - namely natural gas. Such fluctuations expose the intermittent nature of renewables and remind policymakers that the continent cannot simply walk away from oil and gas.
SOCAR’s entry into Italy, therefore, is more than just a corporate milestone; it is a statement about the future of Europe’s energy balance. By securing critical refining and retail assets, Azerbaijan is not only ensuring its own economic diversification but also positioning itself as a vital player in Europe’s energy security. This move cements Baku’s role as a bridge between resource-rich regions and energy-hungry markets.
At a geopolitical level, this deal reflects a pragmatic truth: the world is not ready to abandon fossil fuels. While renewables will continue to grow, traditional energy sources remain indispensable, especially in times of crisis. SOCAR’s expansion is a clear recognition of this reality. For Europe, welcoming an Azerbaijani state company into its energy heartland is not merely about business-it’s about resilience in a turbulent world.
In the end, SOCAR’s acquisition of Italiana Petroli could be remembered as a turning point. It brings together two nations - one at the crossroads of East and West, the other at the core of Europe - in a partnership that transcends commerce. For Azerbaijan, it’s a bold step toward global influence. For Italy and Europe, it’s a lifeline amid uncertain energy futures.
By Tural Heybatov
