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Lukoil is considering a possible sale of its Bulgarian refinery

6 December 2023

The Russian oil group Lukoil announced on Tuesday that it is analyzing a possible sale of its refinery in Burgas (Bulgaria), denouncing the discriminatory measures taken against it by the pro-European Government in Sofia, reports AFP.

“Taking into account the significant changes that have occurred in the operational environment of the companies in Bulgaria belonging to the Lukoil group, the company has started a process of reviewing the strategy regarding this asset. Several options will be analyzed together with international consultants, including the sale”, stated Lukoil in a press release quoted by Agerpres.

Bulgaria, a country that is traditionally close to Moscow and which before the war in Ukraine was almost entirely dependent on Russian natural gas and oil, is now trying to get rid of this dependence.

The neighboring country benefits, until the end of 2024, from an exemption from the embargo introduced by the European Union regarding Russian oil imports. In addition to the oil needed to ensure Bulgaria’s consumption, the Russian Lukoil group has the right to export oil products made at the Burgas refinery to Ukraine and, to a lesser extent, to Europe.

This derogation would end at the end of March 2024, according to a recent proposal by the Sofia Parliament to be finalized in the coming weeks.

The Sofia Government also imposed a 60% tax on the profits made by the Russian oil group Lukoil.

In this context, Lukoil emphasizes that “the review of the strategy is a consequence of the adoption by the Bulgarian authorities of some discriminatory laws and other unfair political decisions towards the refinery”. The Russian group adds that it is the victim of an “artificial political storm” that damages the activities of a company that is not targeted by European and American sanctions and that fulfills all its obligations to the state and employees.

Lukoil has been present in Bulgaria for over 20 years, during which its investments in the Burgas refinery exceeded 3.4 billion dollars. In parallel, however, Lukoil enjoys a quasi-monopolistic position on the Bulgarian market thanks to a network composed of nine oil depots and 220 gas stations.

In Romania, Lukoil owns the Petrotel refinery and sells fuels through a network of 300 distribution stations.

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