site.btaFate of Lukoil Group in Bulgaria Depends on US–Russia Negotiations, PM Zhelyazkov Says

The future of the Lukoil Group in Bulgaria will depend on negotiations between the United States and Russia, Prime Minister Rosen Zhelyazkov said in an interview for the Bulgarian National Radio on Sunday. The fate of Lukoil, like that of Rosneft, is a function of the talks between Washington and Moscow on ending the war in Ukraine and achieving a lasting peace, he noted.

Asked whether the government intends to buy the refinery if sanctions are extended, Zhelyazkov said that all steps undertaken by the Bulgarian state aim to convince the US Office of Foreign Assets Control (OFAC) that the logic and purpose of the sanctions are being observed. Although this places Bulgaria in a position of compliance with a foreign regime, it is the only way to ensure that the refinery can continue to operate, he commented. Under Bulgarian law, the special administrator assumes the rights of the shareholder and may transfer the shares to a selected buyer, with the proceeds from the sale to be blocked in line with OFAC requirements. Any such step would require US licences, the Prime Minister noted.

Commenting on concerns that the US might negotiate with Russia "behind Europe’s back", Zhelyazkov said that this is not the case and that Europe must insist on its own security guarantees. Territorial decisions must be made by the Ukrainian people, he said. According to him, Russia must be compelled to sit at the negotiating table so that a durable peace can be reached at an acceptable cost for Ukraine and for Europe.

Regarding Lukoil Neftochim Burgas, Zhelyazkov said that due to low oil prices and market pressure resulting from the war, the refinery significantly reduced production in 2025 to avoid deepening losses, producing only for the domestic market. This created substantial fiscal difficulties: excise and VAT revenues of nearly BGN 1 billion did not enter the budget due to the refinery’s reduced activity.

Zhelyazkov recalled that four companies in Bulgaria - Neftochim Burgas, Lukoil Bulgaria, Lukoil Jet, and Lukoil Bunker, are subsidiaries affected by sanctions. Although US sanctions are not territorially binding for EU countries, financial institutions are dependent on international payment systems, which made it impossible for the company to pay for crude oil or settle transactions. Without legislative changes adopted earlier this year, the refinery would have had to suspend operations, he said. The goal of the new legislation was to enforce the sanctions regime while ensuring that the refinery could continue functioning and that its revenues would not flow, directly or indirectly, to Russia.