Bulgaria is taking urgent measures to protect its sole oil refinery from potential shutdown as U.S. sanctions targeting its Russian owner, Lukoil, are set to take effect later this month. The Bulgarian Parliament has approved legislative amendments granting expanded authority to a government-appointed manager of the Lukoil-owned Burgas refinery, located on the Black Sea coast. This decision follows the collapse of a deal with a major international commodities trader, which withdrew from purchasing Lukoil’s global assets after the company dismissed U.S. allegations of being a ‘Kremlin puppet.’ Lukoil announced the sale of its international assets in response to U.S. sanctions aimed at pressuring Russia to agree to a ceasefire in its conflict with Ukraine. The company holds significant stakes in oil and gas projects across 11 countries, including the Burgas refinery and numerous gas stations worldwide. The new legal framework empowers the state-appointed manager with substantial operational control, including the authority to sell the refinery’s shares. Opposition lawmakers have criticized the move, warning it could lead to legal disputes and financial repercussions for Bulgaria. Ivaylo Mirchev, leader of the Democratic Bulgaria alliance, argued that the extraordinary powers granted to the manager could result in lawsuits from Lukoil, potentially benefiting Russia financially. The ruling coalition defended the amendments, stating that the U.S. sanctions, effective November 21, would likely paralyze the refinery’s operations due to payment refusals from Lukoil’s counterparties. Acquired by Lukoil in 1999, the Burgas refinery is the largest in the Balkans, valued at approximately 1.3 billion euros ($1.5 billion). It plays a pivotal role in Bulgaria’s economy, with a turnover of 4.7 billion euros ($5.4 billion) in 2024 and a near-monopoly over the nation’s oil depots, gas stations, and fuel supply for ships and aircraft. In preparation for the sanctions, Bulgaria recently imposed temporary restrictions on the export of petroleum products, including diesel and aviation fuel, to ensure domestic supply stability.
Bulgaria moves to prevent shutdown of its only oil refinery ahead of US sanctions
