site.btaControversial Bulgargaz-BOTAS Agreement to Be Re-negotiated, Parliament Resolves

Controversial Bulgargaz-BOTAS Agreement to Be Re-negotiated, Parliament Resolves
Controversial Bulgargaz-BOTAS Agreement to Be Re-negotiated, Parliament Resolves
A 13-year agreement between Bulgargaz and BOTAS was signed in Sofia on January 3, 2023 (BTA Photo)

At an extraordinary plenary sitting on Friday afternoon, Bulgaria's Parliament voted, 166-32 with one abstention, to adopt a resolution assigning the Minister of Energy to take action for re-negotiating an agreement between Bulgarian state-owed natural gas supplier Bulgargaz and Turkish energy company BOTAS signed on January 3, 2023.

The only votes against the motion came from the Movement for Rights and Freedoms. One MP of There Is Such a People abstained.

Under the resolution, all documents at the disposal of an Ad Hoc Committee of Inquiry into the Bulgargaz-BOTAS deal will be made available to the Bulgarian prosecution service, the European Public Prosecutor's Office, the State Agency for National Security, the Energy Ministry, the Energy and Water Regulatory Commission (EWRC), and the Bulgarian Energy Holding.

Critics of the deal argue that, under the take-or-pay agreement, the Bulgarian company undertook to pay nearly USD 500,000 daily to the Turkish supplier for reserving 1.850 billion cu m capacity on regasification terminals in Turkiye for natural gas provided by Bulgargaz and its delivery to the Bulgarian border. For the 15-plus months during which the agreement has been in effect, Bulgargaz has delivered less than 250 million cu m of gas under it but was obliged to pay some USD 250 million for the reserved capacity despite using a tiny fraction of it, the critics claim.

The extraordinary sitting was convened on a motion by Continue the Change - Democratic Bulgaria (CC-DB), after BSP for Bulgaria on Thursday claimed that GERB were trying to cover up corruption, and Vazrazhdane said they would take the matter in their hands and would refer the report to the prosecution service.

As the sitting began, it transpired that the report had not been submitted to the legislature, and the MPs spent nearly two hours arguing whether they could adopt a draft resolution without the report in question. CC-DB accused GERB-UDF of attempting a cover-up of the facts. The report was submitted to Parliament's Registry later in the day.

The Debate

Venko Sabrutev MP of CC-DB: GERB-UDF are actually co-perpetrating a suppression of evidence of a severe financial detriment inflicted on the Bulgarian State. The Ad Hoc Committee has detected a financial detriment amounting to USD 500,000 daily, which adds up to USD 2.4 billion for the 13-year term of the agreement.

Ad Hoc Committee Chair Zhecho Stankov MP of GERB-UDF: The report makes it clear that, under the Boyko Borissov government, Bulgaria paid capacity charges that were one-twentieth of the amount which is paid now. It reveals that the Energy Minister [Rumen] Radev and Finance Minister [Assen] Vassilev in the most recent [regular] cabinet headed by Prime Minister [Nikolay] Denkov did nothing at all to change anything about the finding we will present to you in this report. Hundreds of millions were paid under this agreement without re-negotiating it during the ten months [in which the Denkov cabinet was in office]. The Ad Hoc Committee found that after supplies from Gazprom were discontinued, the Kiril Petkov government [in office from December 2021 to August 2022] continued to pay Gazprom hundreds of million of leva for capacity without receiving any gas. The report found that after Prime Minister Petkov discontinued the supplies [from Gazprom] on April 24, 2022, Bulgaria purchased quantities from other suppliers and the deliveries for April and May were at high prices. The traders were selected in an non-transparent manner.

Energy Committee Chair Delyan Dobrev MP of GERB-UDF: The Denkov cabinet left the Bulgargaz-BOTAS deal as it was in a suspected attempt to bankrupt Bulgargaz to the benefit of its competitor, Overgas, whose owner, Sasho Donchev, is the largest sponsor of Continue the Change, having contributed BGN 500,000 in a natural person capacity. 

Sabrutev: A company of Stankov's mother became a key partner of Bulgargaz.

Borislav Gutsanov MP of BSP for Bulgaria: In the space of a year Bulgargaz had lost some 40% of its market share. Rescinding this agreement would cost Bulgaria over BGN 2 billion, I don't think this is possible the way it has been signed, which is why it should be reviewed. According to the materials at hand, the Council of Ministers was misled about that agreement [referring to a discrepancy between the documents submitted to the government and the agreement itself]. In addition to the 1.850 billion cu m under the agreement with BOTAS, Bulgaria has also contracted 1 billion cu m from Greece and 1 billion cu m from Azerbaijan, or 3.850 billion cu m in total, whereas its annual consumption is 2.6-2.8 billion cu m. This leaves an excess of 1.2 billion cu m, but the transmission charges are nevertheless paid. In the Socialist MP's words, BOTAS charges Bulgargaz USD 9.10 for transmission, compared to EUR 4.50 in Greece. This deal as a rare outrage and national treason in the energy sector.

Yordan Todorov MP of Vazrazhdane: The documents submitted to the Ad Hoc Committee showed that industrial and household customers of electricity at prices endorsed by the EWRC had overpaid more than BGN 185 million.

Ivaylo Mirchev MP of CC-DB (in a bTV interview on Friday afternoon): The agreement committed Bulgaria to pay some BGN 1 million daily in damages if it fails to deliver gas as agreed. Stankov has been withholding the Ad Hoc Committee report for a whole week until he submitted it under pressure from the CC-DB Parliamentary Group. The agreement is one of the worst deals in Bulgaria's history. The European Commission was not consulted on that deal and was not approached for approval. The agreement with BOTAS was concluded by the caretaker cabinet of President Radev when the war in Ukraine was raging and the EU had already imposed a number of sanctions [on Russia]. Right at that time, Bulgaria signed an agreement which does not guarantee at all that the Turkish gas reaching Bulgaria is not actually Russian.

* * *

The Ad Hoc Committee was established in December 2023 after the benefit of the deal to Bulgaria was called into question. The Committee members announced on April 11 that they had finished their work and had found the contract to be detrimental to this country, and promised to deliver a report by the end of this week.

Speaking to reporters in Parliament on Friday, Bulgarian Socialist Party (BSP) leader Korneliya Ninova said that the BSP will refer the Bulgargaz-BOTAS deal to the Bulgarian prosecuting magistracy and the European Public Prosecutor's Office. On Thursday, Vazrazhdane said they would refer the Ad Hoc Committee's report to the prosecution service, and There Is Such a People followed suit on Friday.

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By 19:24 on 20.05.2024 Today`s news

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