Bulgaria is drafting legal changes that will allow it to seize control of sanctioned Russian oil major Lukoil’s (LKOH.MM), opens new tab Burgas refinery and sell it to a new owner to protect the plant from U.S. sanctions, local media reported.
Burgas is Bulgaria’s only oil refinery, and was a key part of Lukoil’s foreign business empire, which began to unravel in recent days after the U.S. joined Britain last month in imposing sanctions on Russia’s two largest oil companies over Moscow’s war in Ukraine.
The draft legislation, first reported by Bulgarian outlet Mediapool on Wednesday, would permit a special manager, if appointed, to oversee the sale of the Burgas oil refinery, which owner Lukoil (LKOH.MM), opens new tab would have no right to vote on or appeal against, the reports said.
“There is a lot of logic in this, which is why today we will submit a draft law on the special governor,” public broadcaster BNT quoted Boyko Borissov, former prime minister and leader of the GERB party – which heads Bulgaria’s coalition government – as saying.
Appointing a special manager to take temporary operational control of Lukoil’s Bulgaria operation would “ensure energy security, prevent a supply crisis, and proactively mitigate the risk of future or secondary sanctions,” according to Martin Vladimirov, director of energy and climate at the Bulgaria-based Center for the Study of Democracy.
A QUESTION OF OWNERSHIP
On October 30, Lukoil announced that global commodity trading house Gunvor would acquire its foreign assets.
For now it remains unclear how Gunvor will manage the huge deals, and whether it will take over each of Lukoil’s foreign assets.
Speaking to Bloomberg Television on Tuesday, Gunvor chief executive Torbjorn Tornqvist said “there are assets perhaps we would feel would be better preserved in other hands”, but did not elaborate.
Gunvor did not immediately respond to Reuters’ request for comment, which was sent outside European business hours.
Lukoil has been under pressure to sell the Burgas refinery due to Western sanctions against Russia. It set a $2 billion price tag, RIA news agency reported in January.
Bulgaria introduced the provision for a special manager for critical infrastructure at Burgas in 2023.
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