Bulgaria to allow LUKOIL plant to export oil to EU despite embargo

Bulgaria will allow LUKOIL’s oil refinery to continue working in the country. The enterprise will also be able to export oil products to the European Union, the country’s government said. According to the Cabinet of Ministers, this will bring an additional €350 million to the Bulgarian budget.

“We have achieved a very important thing: from January 1, 2023, LUKOIL will transfer all production, revenues and taxes payable to Bulgaria, and not, as it was before, to the Netherlands or Switzerland,” said Bulgarian Deputy Prime Minister Hristo Aleksiev after negotiations with top -managers of LUKOIL (citation from AP).

The deal will allow LUKOIL to partially avoid the embargo on Russian oil. The general director of the plant in Bulgaria, Ilshat Sharafutdinov, also noted in a conversation with journalists that the enterprise would not be able to work if exports were stopped.

Bulgarian officials have previously stated that oil and oil products processed in Bulgaria will be considered Bulgarian, and therefore will not fall under the embargo in the EU. Bulgarian Deputy Finance Minister Lyudmila Petkova said that oil products from Russian Urals oil, produced at a local refinery, would be supplied to the international market from Bulgaria.

In Bulgaria, the Russian LUKOIL owns the Burgas petrochemical plant. It is the largest industrial enterprise in Bulgaria, accounting for about 9% of the country’s GDP. Earlier, the Bulgarian government said that the ban on oil exports would harm the country’s economy.

The embargo on the supply of Russian oil to the EU should come into force on December 5, on oil products – on February 5. Bulgaria received a delay and will be able to buy oil in Russia until 2024, since the country does not have an alternative supplier of this raw material. Financial Times informedthat in Germany they do not exclude a possible shortage of oil after the entry into force of the embargo. The Italian authorities may also ask the EU to postpone the embargo on the Lukoil refinery in Sicily in order to avoid stopping it.

Read more about the LUKOIL refinery in Sicily – in the material “Kommersant” “Sicilian Defense”.

Olesya Pavlenko