Wednesday 23 November 2022 - 08:11

Bulgaria to Let Russian Oil Refinery Export Despite EU Warnings

Story Code : 1026351
Bulgaria to Let Russian Oil Refinery Export Despite EU Warnings
The deal between Bulgaria and Russian-owned Lukoil will give an additional 350 million-euro (dollars) boost to Bulgaria's budget, according to estimates by the government in Sofia.

“We achieved something very important: from January 1, 2023, Lukoil will transfer all production, revenues, and taxes to be paid in Bulgaria, and not, as it was before, in the Netherlands or Switzerland,” Bulgarian Deputy Prime Minister Hristo Alexiev said after talks with managers of the Russian oil company.

The deal also benefits Lukoil, allowing its Bulgarian facility to partially avoid an upcoming EU embargo on most Russian oil products.

“The refinery cannot work if exports are curtailed," CEO Ilshat Sharafutdinov warned.

The Balkan country’s sole refinery is the main source of gasoline and diesel fuel sold on the Bulgarian market, but half of the production is for export.

It contributes some 9% of the country’s economic output and employs several thousand people. A shutdown would cause serious troubles to the labor market in addition to the loss of refining capacity.

In June, the EU banned the purchase, import, or transfer of Russian crude oil starting Dec. 5 and other refined petroleum products from Russia starting Feb. 5.

Bulgaria received an exemption and can continue to import crude oil and petroleum products via maritime transport until the end of 2024. It cannot, however, export petroleum products produced from Russian oil in Bulgaria.