Bulgaria
Should Lukoil leave Bulgaria?

Recently, local media have been constantly speculating about Lukoil’s plans to sell the plant in Burgas and leave Bulgaria. As often happens with unofficial information about deals, there are few facts, but rumours in abundance, even in reputable publications.
Recently, the Financial Times published an article about a deal involving a Qatari-British consortium consisting of Oryx Global, controlled by Qatari businessman Ghanim bin Saad Al Saad, and the London trading house DL Hudson as buyers of Lukoil refineries in Bulgaria, and about the completion of the deal by the end of 2024. The news quickly and uncritically slipped through all European media, until the seller himself, Litasco SA, a subsidiary of the Lukoil group and a shareholder of Lukoil Neftochim Burgas in Bulgaria, categorically denied it.
But, as we know, there is no smoke without fire, and it is obvious that rumours about the deal are spread by circles interested in Lukoil leaving Bulgaria. It is no secret that Lukoil is selling under pressure from the Bulgarian authorities, so a change in the local or global political situation may change the plans. After all, in addition to the political vector, one cannot help but take into account the possible economic downsides, since they are especially important for a small country with a resource-dependent economy like Bulgaria.
As an example of possible economic risks, we can consider the situation with the Italian ISAB refinery, which was sold by Lukoil in early 2023. As can be seen from public sources, the previously profitable and successful plant closed the 2023 financial year with losses of 75 million euros. In July 2024, the Illimity Banking Group, founded by Corrado Passera and listed on Euronext STAR Milan, prepared a financing transaction in favour of ISAB in the amount of 350 million euros. Together with the support provided by shareholders in the form of a subordinated loan of 75 million euros, this will enable the launch of the first stage of an ambitious investment plan worth a total of 1.4 billion euros, which ISAB is to implement between 2024 and 2033.
In late August and early September 2024, a series of emergencies occurred at the refinery involving the topping 100 column. The first episode occurred on August 26, when an equipment malfunction caused a powerful emission of an oily substance, which covered the surrounding area with what eyewitnesses described as “oil rain.” A few days later, the second episode led to the ignition of a flare on the topping 100 columns, the flames of which provoked the formation of a huge black cloud, which caused great concern among citizens. The Syracuse prosecutor’s office has opened an investigation into these incidents. The topping column is currently not operational. Such accidents did not occur while the refinery was owned by Lukoil.
Another event attracted the attention of the press and representatives of the political elite, we are talking about the decision of the Rome court to uphold the ban on the operation of the IAS treatment plant in Priolo Gargallo. This ban actually provokes the blocking of the entire industrial zone of Priolo due to the impossibility for the refinery to supply industrial wastewater to the treatment plant. Many politicians have joined the search for an operational solution that will not disrupt the production activities of the oil industry cluster of the city of Syracuse.
In fact, dozens of problems at the once successful plant. And if in the case of the Italian ISAB the consequences are felt in a separate region of the country, then in the case of the Bulgarian plant such risks would affect the entire country, and probably the entire Balkan region, because this refinery is the largest oil refinery in South-Eastern Europe.
In the municipality of Kameno, where the refinery is located, local residents fear that in the event of a change of ownership, they may be left without work, and the quality of life will sharply decrease, the Bloomberg agency notes. At the same time, they speak “warmly” about the company Lukoil Neftokhim, which employs about 1.3 thousand people (as of 2011, Kameno had a population of 4,336). “They talk about the free school supplies that children receive on the first day of school and competitive wages. They fear that the good times will soon end,” the article says.
“People are starting to get scared—it’s hard for an elderly person to find a job. <…> People are worried that the new owner of the oil refinery will keep some operations, but they are not sure about the rest,” Bloomberg quotes Yulia Aliyeva, a store owner in Kameno, as saying.
Bulgaria’s political circles also have mixed feelings about the possibility of selling the refinery. For example, Deyan Nikolov, secretary of the nationalist Revival Party, believes that they started talking about it because, due to the conflict in Ukraine, “it’s very fashionable for politicians to fight Russia.” “It is absolutely clear that Lukoil is just a business here,” he added.
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