Sofia, Bulgaria – In a swift and contentious legislative move, Bulgaria's National Assembly on Friday passed amendments to the Act on Administrative Regulation of Economic Activities Associated with Oil and Petroleum Products, significantly expanding the authority of a special commercial administrator over critical energy infrastructure. The changes, aimed squarely at the Bulgarian operations of Russian oil giant Lukoil, are designed to avert a potential fuel crisis triggered by impending U.S. sanctions set to fully activate on November 21, 2025. Lawmakers from the ruling coalition, including the Movement for Rights and Freedoms – New Beginning (MRF–New Beginning), GERB-UDF, There Is Such a People (TISP), and the Bulgarian Socialist Party (BSP)-United Left, championed the bill as a vital step toward national energy security.
The amendments, which cleared the Energy Committee in the morning and received definitive approval in two readings during a single plenary session, empower the administrator to exercise shareholders' voting rights, oversee daily operations, and even facilitate the sale of assets like shares in Lukoil's subsidiaries, subject to government approval. Proceeds from any such transactions would be held in a special account at the Bulgarian Development Bank, managed by the Finance Ministry, to prevent unauthorized outflows. Notably, the legislation removes previous restrictions, such as a six-month term limit for the administrator and the option for multiple individuals to share the role, allowing for indefinite oversight if needed. This "German model," as described by bill sponsors, mirrors a sanctions exemption strategy employed in Germany, where state intervention has preserved operations at sanctioned Russian-linked facilities without violating international rules.
The urgency of the measure stems from U.S. Treasury Department sanctions imposed on October 22, 2025, under Executive Order 14024, targeting Russia's two largest oil producers, Lukoil and Rosneft, to intensify economic pressure on Moscow's war machine in Ukraine. These sanctions prohibit U.S. persons and entities from engaging in significant transactions with the designated companies, exposing foreign counterparties to secondary sanctions risks. In Bulgaria, Lukoil controls 89.97% of Lukoil Neftochim Burgas AD through its Swiss subsidiary Litasco SA, making the Burgas refinery—Europe's largest in the Balkans and Bulgaria's sole oil processing facility—directly vulnerable. With a capacity of 190,000 to 220,000 barrels per day, the plant processes primarily Russian Urals crude, producing diesel, gasoline, aviation fuel, and petrochemicals that account for roughly 10% of Bulgaria's GDP and supply over 200 Lukoil-branded petrol stations nationwide, alongside depots and aviation fueling services.
Without intervention, the sanctions could halt payments from international partners, freezing operations and sparking shortages across the Balkans. Energy Minister Zhecho Stankov has assured the public that fuel stocks are secured through year-end, but experts warn of cascading effects: skyrocketing prices, supply chain disruptions for NATO allies, and economic ripple effects in Burgas, where the refinery employs thousands and anchors local industries. "The shutdown would not only cripple Bulgaria's energy independence but also undermine regional stability," noted Martin Vladimirov, director of energy and climate at the Center for the Study of Democracy, emphasizing the refinery's role in exporting to neighbors like Romania, North Macedonia, and Ukraine.
The legislative blitz drew sharp opposition. Vazrazhdane party leader Kostadin Kostadinov decried it as "theft of a major asset," arguing it invites Russian retaliation and legal challenges under international arbitration, potentially costing Bulgaria billions in compensation. Continue the Change – Democratic Bulgaria (CC–DB) and other critics, including independent MP Ivaylo Mirchev, accused the coalition of procedural shortcuts—a mere 30-second committee vote—and ulterior motives tied to influential figures like Delyan Peevski of MRF–New Beginning. Mirchev's social media post labeled the rush a "blatant violation of parliamentary rules," suggesting it paves the way for politically motivated asset grabs. President Rumen Radev, who recently vetoed related amendments to the Investment Promotion Act—only to see them overridden by Parliament on November 6—has voiced constitutional concerns, warning that empowering intelligence agencies like the State Agency for National Security (SANS) over commercial decisions erodes the rule of law.
This is not the first flashpoint in Bulgaria's Lukoil saga. Since acquiring the Neftochim complex in 1999, Lukoil has woven itself into the nation's energy fabric, but geopolitical tensions have repeatedly strained ties. EU sanctions in 2022 ended cheap Russian crude imports for most members, but Bulgaria secured a derogation until March 2024, allowing continued Urals processing—a move that fueled accusations of undue influence. By early 2025, Sofia accelerated diversification, sourcing from Kazakhstan, Iraq, and Tunisia, yet the refinery's reliance on Russian feedstock persists, processing up to 93% capacity amid global volatility. Last month, Parliament imposed a temporary ban on diesel and aviation fuel exports to EU states, passed with 135 votes, to prioritize domestic needs and deter speculation—exempting only NATO-related supplies.
Lukoil's response has been frantic. On November 6, the company announced a deal to sell its international arm, Lukoil International GmbH, to Swiss trader Gunvor Group for an undisclosed sum, aiming to divest assets like the Burgas plant valued at around $2 billion. However, the U.S. Treasury swiftly rebuffed the transaction late Thursday, stating it would "never" permit Gunvor to helm Lukoil assets while Russia persists in Ukraine, forcing Gunvor's withdrawal and leaving Sofia to act unilaterally. Moscow condemned the sanctions as "illegal and politically motivated," with Kremlin spokespeople predicting global market distortions and higher prices—echoing broader Russian critiques of Western energy decoupling.
Broader implications ripple across Europe. Bulgaria's moves align with EU efforts to phase out Russian fossil fuels by 2027, including LNG import bans, but highlight the bloc's uneven exposure: while Poland eyes U.S. gas pipelines to Ukraine and Slovakia, Balkan states like Bulgaria remain tethered to legacy Russian infrastructure. Analysts like Ruslan Stefanov of the Center for the Study of Democracy praise the "proactive" stance but caution against overreach: "Nationalization risks inflating compensation claims, diluting sanctions' bite." Potential buyers, including Azerbaijan's SOCAR and U.S. investors, have circled since January, but any deal now hinges on the administrator's green light.
As the November 21 deadline looms, Burgas residents and industry leaders watch warily. The refinery, a hulking symbol of post-communist privatization, has weathered storms—from 2021 competition probes over market dominance to 2023 terminal concessions revoked amid security fears. For now, the amendments—effective upon publication in the State Gazette—offer a lifeline, but they underscore Bulgaria's precarious balancing act: enforcing Western sanctions without self-inflicted wounds. Prime Minister Rosen Zhelyazkov's coalition, formed in January after protracted elections, frames this as a triumph of sovereignty, yet opposition vows constitutional challenges, potentially dragging the issue to court.
In the end, Friday's vote transcends Lukoil; it's a microcosm of Europe's energy chessboard, where sanctions warfare collides with economic survival. As winter approaches, Bulgaria's fuel pumps hum on borrowed time, a stark reminder that de-Russification is as much about resilience as resolve.
