WEC Italy Sec.-Gen.: SOCAR's entry into Italian market may revive country's downstream segment - INTERVIEW

The European energy sector has entered a phase of practical restructuring, where strategic agreements serve as tools for both corporate expansion and increased energy security. Given the European Union's commitment to diversifying supply chains and modernizing infrastructure, capital investments capable of simultaneously strengthening industrial potential and ensuring long-term market stability are becoming critical.

Under these circumstances, the European Commission's verdict approving the acquisition of 99.82% of Italiana Petroli by the State Oil Company of Azerbaijan (SOCAR) has become a landmark event for the Italian energy sector. Essentially, this event signifies not only a formal change of ownership but also the integration of Italy's refining and retail sectors into the larger Eurasian energy architecture.

The regulator's positive decision launched the practical implementation of the agreement and attracted close attention from both market players and expert circles. Michele Vitiello, secretary general of the Italian Committee of the World Energy Council (WEC Italy), spoke to Report about the likely timeline for the deal's completion, the potential impact of Azerbaijani investments on Italy's oil refining industry, the competitive environment in the fuel market, and the importance of Azerbaijani gas for the country's energy security.

Report presents the interview:

- Mr. Vitiello, last week the European Commission approved SOCAR's acquisition of a 99.82% stake in Italiana Petroli. Does this mean the asset merger will be completed as planned, without additional legal or administrative hurdles? Or are there still circumstances that could alter the timing of the agreement's finalization?

- The European Commission's approval represents a decisive and highly significant step. Generally speaking, when a transaction passes European competition scrutiny, the path toward closing is clearly defined and the indicated timeline – in this case, by the end of the first quarter of 2026 – appears consistent. Naturally, as with all transactions of this scale, there are still technical and formal steps to be completed, which may concern national authorization profiles or aspects related to governance and industrial integration. However, at this stage, there are no elements suggesting structural obstacles or delays of a political or regulatory nature. Closing within the indicated timeframe, therefore, appears to be a realistic objective, while acknowledging that the complexity of an operation of this magnitude always requires a degree of prudence.

- What are WEC Italy's expectations regarding the scale of Azerbaijani investments in modernizing Italy's oil refining facilities and logistics infrastructure? Could this project become a catalyst for renewing Italy's downstream sector and strengthening its competitiveness?

- The value of the transaction, estimated between €2.5 and €3 billion, reflects the strategic relevance of the asset. From a country-system perspective, what matters is not only the initial figure, but the investor's ability to implement a credible medium- to long-term industrial plan. If SOCAR's entry translates, as we believe it will, into investments in the modernization of refining facilities, process efficiency improvements, and the strengthening of logistics and storage infrastructure, the transaction could represent a driver for the revitalization of Italy's downstream sector (processing and sale). The refining industry in Europe is currently facing a complex phase, characterized by compressed margins and increasingly stringent environmental standards. In this context, the availability of capital and a stable industrial vision can help make facilities more competitive, more sustainable, and better integrated into European energy value chains. If supported by a coherent strategy, well embedded in the Italian market and in dialogue with local communities and the environment, the operation can therefore have a catalytic effect.

- Italiana Petroli operates the largest network of petrol stations in Italy. How might SOCAR's arrival as a vertically integrated energy company impact the structure and competition in the retail fuel market? Could this impact pricing and service quality for end consumers?

- The network of more than 4,500 service stations represents one of Italiana Petroli's main assets and an excellence of our country. The entry of a vertically integrated operator such as SOCAR may positively impact the efficiency of the supply chain, from procurement to distribution, generating economies of scale and greater logistical rationalization. As for pump prices, it is important to be clear: they largely depend on international quotations of refined products and on taxation, which in Italy weighs more heavily than in many other countries. It is not realistic to expect structural price changes solely as a result of a change in ownership. A more plausible impact would be on the qualitative side, with investments in the network, digitalization of services, diversification of the offering, and the gradual integration of multi-energy solutions, including infrastructure for alternative fuels and electric mobility. In this sense, competition could strengthen on the grounds of innovation and service quality. Multilateral dialogue is always beneficial for competition and, ultimately, for consumers.

- Since January 2026, the Trans Adriatic Pipeline (TAP) has provided market participants with access to additional transportation capacity of 1.2 billion cubic meters annually. The question arises: how quickly has Italy begun contracting these resources? Furthermore, it remains to be seen whether this expansion is sufficient to successfully implement the strategy of supply diversification and the gradual replacement of other sources of imported gas.

- The expansion of TAP's transportation capacity by 1.2 billion cubic meters per year represents a step consistent with Italy's diversification strategy. The speed at which these volumes are effectively utilized, however, depends on market dynamics: domestic demand, storage levels, LNG availability, and price differentials among different sources. In recent years, Italy has partially reduced its gas consumption compared to pre-crisis peaks, and this affects how additional capacity is absorbed. It is important to underline that 1.2 billion cubic meters are not the sole solution to the issue of energy security, but they certainly contribute to strengthening a broader supply mosaic that includes pipelines, LNG, renewables, and energy efficiency. Security is built through the plurality of sources and routes.

- Azerbaijan has now established itself as one of the leading gas exporters to Italy, with annual demand ranging between 67 and 68 billion cubic meters. How important is Azerbaijani fuel for maintaining Italy's energy stability? Are you considering opportunities to deepen cooperation, both in terms of increasing export volumes and in the area of ​​energy transition and the implementation of green technologies?

- Azerbaijan is today one of Italy's key suppliers, and Azerbaijani gas has taken on a structural role in our diversification strategy. In a context where European energy security has returned to the center of the political agenda, the contribution of the Southern Gas Corridor has strengthened the resilience of the Italian system, reducing dependence on single import routes. Looking ahead, there is room for further development of cooperation, both in terms of supplies – in line with production and infrastructure capacities – and in the field of energy transition, knowledge exchange, and business opportunities. The energy dialogue between Italy and Azerbaijan can progressively expand to technologies and projects related to decarbonization, emissions reduction in the gas sector, and the development of new energy molecules (hydrogen, biomethane, synthetic fuel, ammonia - ed.).

In this sense, the relationship goes beyond the commercial dimension and becomes part of a broader partnership combining security, investment, and energy system transformation. The Mediterranean has always been a natural bridge for dialogue, and in today's increasingly complex global scenarios, strengthening the solidity of relationships is essential.