Bulgaria’s parliament on November 13 overturned President Rumen Radev’s veto on a law that gives the government more control over the local assets of Russia’s oil company Lukoil, less than ten days before new US sanctions take effect.
The decision comes ahead of US sanctions on Lukoil that take effect on November 21, which could block payments and halt the operation of its Bulgarian assets. The government of Prime Minister Rosen Zhelyazov is in talks with Washington to delay the measures by up to one year, though officials say a six-month extension is more likely.
Lawmakers voted 128–59 to reject the veto and approve amendments allowing the state to appoint a special administrator to run Lukoil’s operations in Bulgaria, including the Neftochim Burgas refinery — the largest in the Balkans — and its network of gas stations, BTA reported.
The new rules allow the administrator to sell company assets and make decisions that cannot be challenged in court or through administrative appeals.
President Radev had vetoed the bill on November 12, saying it gave excessive power to the government and risked “arbitrariness and abuse.” Lawmakers from the ruling majority quickly rejected his objections in an emergency session that same evening.
Energy Minister Zhecho Stankov said the new powers are needed to secure fuel supplies. “The special administrator will ensure the refinery continues operating if imports of Russian crude are banned or if the company refuses to cooperate,” he told lawmakers.
The Burgas refinery supplies most of Bulgaria’s fuel and is considered a vital national asset. Officials fear the sanctions could disrupt production, causing shortages and price hikes.
The post of special administrator was first created in 2023 when Lukoil resisted switching to non-Russian crude. Under the new amendments, the administrator will have full control over operations and financial monitoring to prevent funds from being sent to sanctioned entities.
OFAC imposed sanctions on October 23 against Lukoil and Rosneft as part of expanded measures targeting Russia’s energy sector. The restrictions block financial transactions and services, giving the companies until November 21 to wind them down.
Carlyle Eyes Lukoil Assets After Gunvor's $22 Billion Deal Collapses
Carlyle is in talks with Lukoil for the potential acquisition of the latter’s international operations, Reuters has reported, citing unnamed sources. The news follows Gunvor’s attempt to buy the assets, only to change its mind after the Trump administration called it a “Kremlin puppet” and said it would block the deal.
The private equity major is still in the early stage of the negotiations, but it has applied for a license that would clear the way to an acquisition, one of the Reuters sources told the publication. The next step would be due diligence, which would need to take place soon because the sanctions against Lukoil kick in on November 21, making any dealings with it by companies using the U.S. financial system illegal.
Lukoil is the most active Russian energy company internationally, with upstream operations in the Middle East, Central Asia, and Latin America, and retail fuel businesses in many parts of the world, including the United States. The company announced plans to sell its international business following President Trump’s decision to step up pressure on Russia in a bid to bring it to the peace negotiations table with Ukraine. The latest round of sanctions zero in on Lukoil and Rosneft, which together account for about half of Russia’s total oil exports. Lukoil alone produces some 2% of the world’s oil, Reuters noted in its report.
Swiss-based commodity major Gunvor was quick to make an offer for the business at $22 billion. The U.S. government, however, was equally quick in its reaction to the news, with the Department of the Treasury saying, “President Trump has been clear that the war must end immediately. As long as Putin continues the senseless killings, the Kremlin’s puppet, Gunvor, will never get a license to operate and profit.
Gunvor was co-founded by a Russian businessman, Genadiy Timchenko, who, however, sold his stake in 2014. The Swiss commodity firm has called the Treasury’s claims “fundamentally misinformed and false.”
By Irina Slav for Oilprice.com
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