Also included in the deal are three fuel terminals located in Augusta, Palermo and Naples, and their associated pipelines.

The Augusta refinery has a capacity of processing 175,000 barrels of oil per day, reported Reuters. Capable of processing Sahara Blend as well as residual fuel from Skikda, the Augusta refinery is being planned to be integrated directly into Sonatrach’s refining system.

The transaction marks the Algerian company’s first investment in international refining in Italy.

Sonatrach CEO Ould Kaddour said: “The geographical proximity of Italy and the privileged relations that have always linked SONATRACH to this country make it natural that our first acquisition in refining should be in Italy. The Augusta refinery represents an ideal asset geographically and in terms of potential synergies with the Skikda refinery.

“We intend to ensure the continuity of its management, the stability of employment and continue to advance its already high standards in terms of health, safety and respect for the environment. SONATRACH also intends to establish and foster an open and permanent dialogue with all stakeholders in this operation.”

As part of the deal, Esso Italiana and the companies of the ExxonMobil Group will also sign long-term commercial and technological contracts with Sonatrach.

The agreements relate to the supply of petroleum products, operational and development activities and the use of fuel depots in Augusta, Palermo and Naples.

The transaction will not impact Esso branded service stations, fuels and lubricants wholesalers, and also ExxonMobil’s other operations in Italy.

Esso Italiana president and CEO Gianni Murano said: “The decision is the result of a thorough and careful evaluation.

“Our commitment to Italy, the country where we have been operating for more than 125 years, is not diminished. Esso Italiana and the companies of the group will continue to serve the market and its customers.”

The transaction is expected to be closed by the year end and will be subject to regulatory to relevant approvals and other conditions. Following the completion of the deal, 660 Esso Italiana employees at the facilities involved in the transaction will be transferred to Sonatrach.