site.btaEnergy Minister: No Formal Expressions of Investor Interest in Lukoil Bulgaria Assets

Bulgaria's Energy Ministry has not received any formal expressions of investor interest in the assets of Lukoil Bulgaria, Energy Minister Zhecho Stankov told bTV on Sunday evening.
 
Any letters arriving at the Ministry stem mainly from his three-week round of talks with all the major global companies aimed at securing supplies of refined products - diesel and petrol - should the refinery suspend operations, Stankov said. The ministry is receiving chiefly indications from large companies willing to deliver crude oil to Bulgaria, which he forwards to the special administrator, Rumen Spetsov. He was appointed on November 14 to oversee Russian oil company Lukoil's four operations in Bulgaria.

Stankov identified as the top priorities safeguarding the country's energy security and securing a temporary waiver, similar to those granted by the United Kingdom and the United States. 

On October 22, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) expanded its sanctions on Russia by designating that country's two largest oil companies, Rosneft and Lukoil. The idea is to step up economic pressure on Russia's energy sector, which is a critical source of revenue for the Kremlin's military operations in Ukraine. The Lukoil assets in Bulgaria include Lukoil-Bulgaria EOOD (a chain of over 200 filling stations), Lukoil Neftochim Burgas AD (the largest oil refinery in the Balkans), Lukoil Aviation Bulgaria EOOD (an aircraft refuelling operation), and Sustainable Energy Supply EOOD (marketing and trading in natural gas and other hydrocarbons).

Stankov said Sofia had to demonstrate to the sanctioning states that no funds from the Bulgarian subsidiaries of the sanctioned parent company Lukoil would be transferred abroad. He recalled that Parliament adopted legislation to ensure this.

The legislation provides a full suite of tools, with the special administrator effectively acting as shareholder. The administrator guarantees that all payments and operational management comply with the sanctions regime, Stankov said.

He added that one option envisaged by the law is an acquisition of the refinery, though such a step cannot be taken unilaterally by the special administrator. Any decision would require formal approval from the Council of Ministers, he said.

Asked about the outlook for fuel prices in the coming months, Stankov said it hinges on the geopolitical environment. Oil and natural-gas markets have been highly sensitive to military conflicts in recent years, making it difficult to forecast movements in the winter months and beyond, he said.

He stressed that as a producer of refined products, Bulgaria needs to secure the best possible prices. Regarding Parliament's ban on diesel and aviation-fuel exports, he said this was the right thing to do before the sanctions were paused, but argued that steps should now be taken to lift the ban.

According to Stankov, removing the ban would bring additional budget revenue, as the refinery is operating at minimum capacity and is focused solely on domestic supply, processing around 10,000 tonnes a day. Asked whether the state budget was losing revenue due to the restriction, he said he prioritizes energy security over fiscal considerations, adding that Bulgarian households and businesses must be guaranteed sufficient and affordable fuel.