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News	Kokel, Nicolas Burgas Refinery 2025/05/05 01:04 PM Lukoil Considers Sale of Bulgaria’s Burgas Refinery Amid Sanctions and Market Shifts View Main Message Lukoil Neftohim Burgas Oil Refinery May 5, 2025 -- Russia’s Lukoil is actively exploring the sale of its Burgas refinery, Bulgaria’s largest and only operational oil refinery, as mounting sanctions, new Bulgarian regulations, and shifting crude oil supply dynamics reshape the country’s energy landscape. The 190,000 barrel-per-day facility, officially known as Lukoil Neftochim Burgas, has been a cornerstone of Bulgaria’s fuel supply since Lukoil acquired it in 1999. Now, the company is seeking to exit under growing economic and political pressure. The push to sell comes after Bulgaria banned the use of Russian crude in March 2024 and imposed a 60% tax on the refinery’s profits, a rate that will only drop to 15% if the asset is sold to a non-Russian owner. The European Union’s broader sanctions against Russia over the war in Ukraine have further complicated Lukoil’s position, forcing the refinery to pivot to Kazakh, Middle Eastern, and other non-Russian oil sources. These changes have squeezed margins and made continued Russian ownership increasingly untenable. Lukoil has confirmed it is reviewing its Bulgarian strategy with the help of international consultants and is considering various options, including a full sale of its Bulgarian business. Several potential buyers have emerged. Kazakhstan’s state oil company KazMunayGas has publicly confirmed its interest, reportedly offering around $1 billion for the refinery. The company already supplies about 40% of the crude processed at Burgas and owns significant refining assets in Romania, making the acquisition a strategic fit. Hungary’s MOL Group and a Qatari-British consortium led by Oryx Global and DL Hudson have also been reported as bidders, though Lukoil has denied that any deal is finalized. The refinery’s strategic location on the Black Sea, with access to the Rosenets port, makes it a valuable asset for regional fuel supply and export. However, the combination of sanctions, a ban on Russian crude, and new tax burdens have weighed on its valuation and complicated negotiations. Analysts note that while the reported $1 billion price tag is below some comparable deals, the regulatory environment and need for further modernization-estimated at €500 million-are likely factors in the discounted value. As of May 2025, the sale process is ongoing, with binding offers accepted but no final agreement announced. #lukoil #burgas #bulgaria #molgroup #kazmunaygas #oilrefinery #russiancrude #ural
News	Kokel, Nicolas Burgas Refinery 2024/04/09 01:26 PM 🇧🇬🇷🇺 Lukoil Neftochim Refinery in Bulgaria Faces Potential Sale Amid Political Shift View Main Message Recent discussions spotlight the potential sale of Lukoil Neftochim in Bulgaria, echoing a broader narrative of severing ties with Russia. Bloomberg's analysis underscores the significance for Bulgaria to distance itself from Russian influence, particularly by ousting Lukoil from the country, aligning with EU and NATO allies. Amidst Bulgaria's evolution since the end of communist rule, divesting from Russian interests emerges as a crucial step. Contrasting Hungary and Serbia, severing ties would solidify Bulgaria's allegiance to Western alliances. Critical to this transition, as per Bloomberg and Bulgarian officials, is the acquisition of Lukoil Neftochim by a reputable international entity from Europe, the US, or the Gulf states. This move aims to dismantle Lukoil's sway over Bulgaria's political and economic spheres. Emphasizing the need for independence in critical supplies, the Bulgarian government aims to avoid reliance on unfriendly nations like Russia. Yet, sentiments within Lukoil Neftochim, employing approximately 1300 individuals, reflect a fondness for the Russian company, underscoring historical ties. While Lukoil has not publicly announced intentions to sell the refinery, speculation persists, with the Bulgarian Finance Ministry suggesting active pursuit of potential buyers. Litasco SA, Lukoil's international marketing and trading arm, refrained from comment, further fueling speculation surrounding the refinery's fate. #bulgaria #russia #refining #Refinery

Kokel, Nicolas

Burgas Refinery

2025/05/05 01:04 PM

Lukoil Considers Sale of Bulgaria’s Burgas Refinery Amid Sanctions and Market Shifts

Lukoil Neftohim Burgas Oil Refinery

May 5, 2025 -- Russia’s Lukoil is actively exploring the sale of its Burgas refinery, Bulgaria’s largest and only operational oil refinery, as mounting sanctions, new Bulgarian regulations, and shifting crude oil supply dynamics reshape the country’s energy landscape. The 190,000 barrel-per-day facility, officially known as Lukoil Neftochim Burgas, has been a cornerstone of Bulgaria’s fuel supply since Lukoil acquired it in 1999. Now, the company is seeking to exit under growing economic and political pressure.

The push to sell comes after Bulgaria banned the use of Russian crude in March 2024 and imposed a 60% tax on the refinery’s profits, a rate that will only drop to 15% if the asset is sold to a non-Russian owner. The European Union’s broader sanctions against Russia over the war in Ukraine have further complicated Lukoil’s position, forcing the refinery to pivot to Kazakh, Middle Eastern, and other non-Russian oil sources. These changes have squeezed margins and made continued Russian ownership increasingly untenable.

Lukoil has confirmed it is reviewing its Bulgarian strategy with the help of international consultants and is considering various options, including a full sale of its Bulgarian business. Several potential buyers have emerged. Kazakhstan’s state oil company KazMunayGas has publicly confirmed its interest, reportedly offering around $1 billion for the refinery. The company already supplies about 40% of the crude processed at Burgas and owns significant refining assets in Romania, making the acquisition a strategic fit. Hungary’s MOL Group and a Qatari-British consortium led by Oryx Global and DL Hudson have also been reported as bidders, though Lukoil has denied that any deal is finalized.

The refinery’s strategic location on the Black Sea, with access to the Rosenets port, makes it a valuable asset for regional fuel supply and export. However, the combination of sanctions, a ban on Russian crude, and new tax burdens have weighed on its valuation and complicated negotiations. Analysts note that while the reported $1 billion price tag is below some comparable deals, the regulatory environment and need for further modernization-estimated at €500 million-are likely factors in the discounted value.

As of May 2025, the sale process is ongoing, with binding offers accepted but no final agreement announced.

#lukoil #burgas #bulgaria #molgroup #kazmunaygas #oilrefinery #russiancrude #ural

Kokel, Nicolas

Burgas Refinery

2024/04/09 01:26 PM

🇧🇬🇷🇺 Lukoil Neftochim Refinery in Bulgaria Faces Potential Sale Amid Political Shift

Recent discussions spotlight the potential sale of Lukoil Neftochim in Bulgaria, echoing a broader narrative of severing ties with Russia. Bloomberg's analysis underscores the significance for Bulgaria to distance itself from Russian influence, particularly by ousting Lukoil from the country, aligning with EU and NATO allies.

Amidst Bulgaria's evolution since the end of communist rule, divesting from Russian interests emerges as a crucial step. Contrasting Hungary and Serbia, severing ties would solidify Bulgaria's allegiance to Western alliances.

Critical to this transition, as per Bloomberg and Bulgarian officials, is the acquisition of Lukoil Neftochim by a reputable international entity from Europe, the US, or the Gulf states. This move aims to dismantle Lukoil's sway over Bulgaria's political and economic spheres.

Emphasizing the need for independence in critical supplies, the Bulgarian government aims to avoid reliance on unfriendly nations like Russia. Yet, sentiments within Lukoil Neftochim, employing approximately 1300 individuals, reflect a fondness for the Russian company, underscoring historical ties.

While Lukoil has not publicly announced intentions to sell the refinery, speculation persists, with the Bulgarian Finance Ministry suggesting active pursuit of potential buyers. Litasco SA, Lukoil's international marketing and trading arm, refrained from comment, further fueling speculation surrounding the refinery's fate.

#bulgaria #russia #refining #Refinery

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