5 Dec 2023 12:03

Lukoil to review strategy for assets in Bulgaria, look into various options, including selling the business

MOSCOW. Dec 5 (Interfax) - Lukoil has begun work to review the strategy of the group's enterprises in Bulgaria owing to the substantial change in conditions, the Russian oil company said in a statement.

"Various options will be analyzed with the involvement of international consultants, including selling the business," Lukoil said.

"The Lukoil Group has been actively investing in the development of its assets in Bulgaria for more than 20 years. In particular, investments in the Burgas refinery, exceeding USD 3.4 billion, have turned it into one of the most environmentally efficient and technologically advanced refineries in Europe. In addition, a modern distribution network has been established, including 220 petrol stations and 9 oil depots, as well as enterprises for bunkering ships and aircraft. The group's operations in Bulgaria have traditionally maintained high world standards of corporate and social responsibility," the statement said.

"The revision of the strategy is a consequence of the adoption by the Bulgarian state authorities of discriminatory laws and other unfair, biased political decisions towards the refinery, which have nothing to do either with the civilized regulation of a large business or with increasing the revenue part of the country's budget," Lukoil said.

"The artificially fanned political storm around the enterprise of a large international commercial structure, which is not subject to sanctions by the European Union and the United States, and which fulfils all its obligations to the state and its workers, harms the business of Lukoil, the investment climate in Bulgaria, inexorably destroys the image of the Republic in the eyes of global business, negatively affects the revenues of the state budget," the statement said.

Lukoil will inform the country's authorities about the company's further actions with regard to its assets in Bulgaria.

Lukoil began operations in Bulgaria in October 1999, becoming the owner of a controlling stake in the Burgas refinery with a capacity of 8.8 million tonnes. The company also operates a network of more than 500 filling stations in the country.

Bulgaria and several other EU countries are exempt from a ban on Russian oil imports until the end of 2024, but the government has decided to phase out Russian crude from March next year. In addition, Bulgaria recently imposed a 60% income tax for the Burgas refinery, which will be reduced to 15% only after the sale of the asset. The facility is also due to undergo a 500 million euro modernization to enable the refinery to process lighter non-Russian grades of crude.