* Shell mulling sale of downstream assets in Italy
* Italy's petrol network fragmented
* Saras Q1 core earnings 48.2 mln euros vs 21.1 mln yr ago
By Stephen Jewkes
MILAN, May 15 (Reuters) - Italian refiner Saras andRussian partner Rosneft are eying the petrol stationnetwork that oil major Royal Dutch Shell is mullingselling in Italy, a Saras executive said on Wednesday.
"I think they (Rosneft) are probably going to take a lookand we hope to be able to cooperate with them," Saras ManagingDirector Dario Scaffardi said in a conference call after thecompany reported core earnings of 48.2 million euros ($62.56million) in the first quarter.
In April Shell said it was considering selling some of itsItalian downstream assets including its retail, aviation andsupply and distribution businesses.
"They (Rosneft) have a definite interest in expanding theirsupply chain from upstream to downstream," Scaffardi said.
Rosneft said, however, they had not seen the proposal.
"Rosneft did not receive such kind of proposal yet," aspokeswoman said.
Saras, controlled by the Italian Moratti family which alsoowns Serie A soccer club Inter Milan, reached a deal in Aprilthat will see Rosneft take a stake of up to 21 percent in therefiner.
Shell is Italy's seventh biggest petrol retailer with 983sales points in the country compared to top retailer Eni's4,698, according to data from Italian petrol association UnionePetrolifera.
Falling demand due to ongoing recession has led many car-madItalians to leave their vehicles at home, squeezing margins atmany petrol retailers and prompting calls for consolidation.
Italy has a total of around 23,000 petrol stations acrossthe country, more than twice the number in the UK and almostdouble the number in France.
Saras's joint venture deal with Rosneft, which still needsto be finalised, strengthens the Russian group's presence in theMediterranean area and offers the Italian refiner better accessto feedstock.
Flagging refining margins and weaker demand from traditionalmarkets have hurt earnings at Saras's main refinery on theisland of Sardinia.
Earlier on Wednesday Saras said its core earnings in thefirst quarter rose to 48.2 million euros from 21.1 million eurosthe same period last year, boosted by firmer refining marginsand less maintenance.
