The President of Bulgaria vetoed the law on the takeover of the Lukoil refinery

On Wednesday, Bulgarian President Rumen Radev vetoed legal changes that would allow the government to take control of the Burgas refinery, most of whose assets belong to the Russian company Lukoil, and then sell it and thus protect itself from US sanctions.

Radev returned the bill on this matter to parliament for further discussion. He also argued that it does not provide legal protection against future claims against the state, violates the Bulgarian constitution and poses a threat to public finances.

Parliament adopted a law regarding the Neftochim refinery in Burgas, the largest enterprise of its type in the Balkans, last Friday (November 7). It provided for the creation of the position of a special government representative for the refinery – who would supervise its activities after November 21, when US sanctions enter into force.

A special administrator of the plant would be given the right to sell the refinery's assets, mortgage and pledge them. Its decisions would not be subject to judicial and administrative review. He would be appointed by the government and upon his appointment all shareholders would lose all rights.

“The scope of application of the act has been unjustifiably extended to a dangerous extent,” Radev said in a statement. He added that guarantees that were supposed to reduce the risk of future claims against the state were removed.

The US and Britain imposed sanctions on two major Russian oil companies, Lukoil and Rosneft, last month. The decisions of Washington and London have raised concerns in Bulgaria about fuel supplies before winter. Lukoil controls the Neftochim refinery and hundreds of gas stations in the country.

Bulgarian Energy Minister Zhecho Stankov told parliament on Wednesday that Sofia applied to the US Office of Foreign Assets Control (OFAC) for exemption from sanctions at the end of October.

He assured that the security of fuel supplies for residents is ensured, as Bulgaria has supplies of oil for six months, diesel for four months and jet fuel for two months.

The Neftochim petrochemical plant was sold to a Russian company in 1999 for USD 101 million. Russians received 58 percent. shares and carried out a major modernization of the refinery. (PAP)

mw/rtt/