Both Bulgaria and Romania are seeking to delay the sanctions imposed by US authorities on Lukoil and Rosneft’s global operations to prevent costly disruptions at local refineries.

Bulgaria, where Russian oil company Lukoil owns the country’s only refinery and supplies nearly 80% of fuel demand, passed a controversial bill on November 7 allowing the state to assume management of the Burgas refinery ahead of US sanctions coming into effect on November 21. Romania, where Lukoil operates the smallest of the nation’s three refineries and covers about 20% of the market, has not yet taken action.

A proposed acquisition by Swiss-registered Gunvor of Lukoil’s regional assets, including those in Bulgaria and Romania, has been vetoed by the US Office of Foreign Assets Control (OFAC), which argued the trader was concealing Russian state interests. The deal was supposed to keep the two refineries in operation and prevent complications in both Bulgaria and Romania. Its failure precipitated the authorities in Sofia and Bucharest, proportional to the weights held by the Russian group in each of the two countries. 

In Moldova, where Lukoil has no refinery but remains a key fuel distributor and controls the sole kerosene supplier at Chisinau International Airport, the government has ordered the company to sell its operations within two weeks.

Bulgaria takes radical action

On November 6, Bulgarian legislators voted 125 to 74 to override President Rumen Radev’s veto of a bill enabling the government to appoint a special administrator for Lukoil’s Neftochim refinery in Burgas, AP reported. The measure effectively removes Lukoil’s voting rights and right to appeal, extending earlier provisions from 2023 that allowed temporary state control over strategic assets.

The bill’s authors said the amendments mirror the German precedent used for Rosneft assets, already accepted by US authorities as a temporary state oversight mechanism, Novinite explained. The Neftochim refinery, with a refining capacity of 7mn tonnes per year, is Bulgaria’s largest industrial facility.

“Lukoil supplies two-thirds of Bulgaria’s end-user fuel,” said Radostina Primova, senior analyst at the Centre for the Study of Democracy in Sofia, cited by CBC News.

Interest in Neftochim is reportedly high. Kazakhstan’s KazMunayGas has offered $1bn, while Hungary’s MOL Group, Turkey’s Cengiz Holding and Azerbaijan’s SOCAR have also expressed interest. Lukoil values its Bulgarian assets at $2bn.

The chairman of the State Reserve, Assen Assenov, told BNT that Bulgaria’s fuel reserves can cover at least 60 days of consumption.

“All quantities purchased with money from the budget are located on the territory of the country,” he said.

Romania seeks time

Romania, home to Lukoil’s Petrotel refinery in Ploiești (2.5mn tonnes annual refining capacity), has yet to announce formal measures. Bucharest seeks to delay imposing the sanctions while it develops its own response, a senior government official, who spoke on condition of anonymity, told Epoch Times. Nationalisation is viewed as a “last resort,” the official added. At the same time, selling the refinery is complicated by the investments it needs, its relatively small size and the competition on the local market.

Energy Minister Bogdan-Gruia Ivan said Bucharest is “operationally prepared for any scenario”. 

Given Petrotel’s modest contribution — around 20% of domestic supply — the potential impact of a shutdown would be limited.

“Under the worst-case scenario, a shutdown would lead to a few months of moderate price increases,” Expert Forum analyst Otilia Nuțu told Epoch Times.

“The government’s plan will aim to preserve Romania’s economic activity, but at the same time stop financing the Russian Federation,” Ivan said, without elaborating.

Moldova orders Lukoil to sell assets

Moldova has instructed Lukoil to divest its local assets by November 21 as US sanctions approach. Although Lukoil has no refining capacity in Moldova, it controls a significant share of the domestic fuel market and dominates aviation fuel supply at Chisinau International Airport.

“Yes, it’s a major player. It has approximately 20-30% of the retail market, and even more in the gasoline market. By November 21, government agencies that have contracts with the company must terminate them, or Lukoil must sell its assets. As far as I understand, they’re already doing this,” said Radu Marian, chairman of the parliamentary commission on economy, budget and finance, in an interview with NewsMaker.

Marian said the government is confident the transition will be smooth. “There are sufficient reserves, and there are other companies and offers on the market. Speaking of the aviation fuel market, several companies have already offered to buy out Lukoil’s operations. We’re taking steps to ensure everything goes smoothly,” he added.