Sources say that commodity traders are expected to bid for Italy's IP in May.

Two sources confirmed on Thursday that global commodity traders Glencore and Gunvor were considering the possibility of buying oil refiner Italiana Petroli API group.

State Oil Company of Azerbaijan is also interested in the asset, two sources with knowledge of the transaction said.

Glencore and Gunvor have declined to comment. SOCAR and IP did not respond to requests for comment.

IP, which UniCredit advises on the possible sale, is owned and operated by the Italian Brachetti Peretti family. It has a total refinery capacity of about 200,000 barrels a day. It also owns a network consisting of 4,600 fuel station.

A potential IP deal would allow international commodity groups to play a greater role in Italy's refining industry, while private investors withdraw as profit margins become more volatile.

Trafigura, a global commodity trader, is part of a consortium that will buy the ISAB refinery in Sicily, with a 320,000 bpd production capacity, from Russia's Lukoil by 2023.

Petraco, a Swiss trading house, also owns a stake in Iplom which operates the Busalla refinery (which produces 40,000 barrels per day) near Genoa.

This fits in with a larger picture where major trading houses are buying up assets from independent and oil majors alike that would otherwise look to convert their conventional refining assets to biorefining or close them.

IP is the owner of the Ancona refinery, the SARPOM refinery near Novara in Trecate and a tolling agreement for the Alma refinery at Ravenna.

Trecate is primarily involved in the production of fuels, while the two other plants produce bitumen.

Italian media reported first that IP owners were considering selling the company but did not give details about the timeline of the sale process. Reporting by Francesca Landini in Milan and Valentina Z in London, with editing by David Evans.

(source: Reuters)