Bulgaria's President Rumen Radev has vetoed legislative changes that would give sweeping powers to a government-appointed manager overseeing the country’s oil refinery, owned by Russia’s sanctioned oil company Lukoil, the presidency said on November 12.

Radev blocked amendments to the law, which expand the powers of a future special administrator responsible for managing Lukoil’s Bulgarian assets, including the Neftochim Burgas refinery and a nationwide chain of gas stations, the president’s press office said.

The veto comes just ten days before new US sanctions on Lukoil take effect, which could block the operation of its Bulgarian assets. The government of Prime Minister Rosen Zhelyazov is in talks with Washington to secure a one-year postponement of the ban on payments to Lukoil, though officials say a six-month derogation is more likely.

Last week, the Bulgarian parliament approved the changes in two readings during a single sitting, expanding the powers of a “special manager” who would take control of Lukoil’s Bulgarian operations. Under the new rules, the manager would be allowed to sell company assets, while his actions would not be subject to administrative or judicial review.

Supporters of the law, led by the ruling GERB party, say it is needed to secure control over a critical energy facility and ensure the country’s fuel supply once the US sanctions take effect.

But Radev said the amendments “undermine the rule of law, contradict basic European norms, and pose a high risk to public finances and the investment environment.” He warned that they effectively allow for “the indirect nationalisation of assets” and could lead to “arbitrariness and abuse.”

“The legislative changes remove guarantees against abuse and put the acts of the special administrator beyond judicial control,” Radev said. “They violate constitutional principles such as the right to legal defense, judicial oversight, and the protection of private property.”

Despite his objections, the veto is likely to be overturned by parliament, where the ruling coalition holds a majority.

US sanctions deadline approaching

The US Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on October 23 against Lukoil and Rosneft, Russia’s two largest oil companies, as part of expanded measures targeting the Russian energy sector. The sanctions suspend access to financial transactions and services, giving Lukoil one month to end them.

From November 21, purchases of crude oil for the Burgas refinery, as well as sales of refined products through its gas stations, will become impossible unless a waiver is granted.

The refinery in Burgas — the largest in the Balkans — supplies most of Bulgaria’s fuel and is considered a key national asset. The government fears that a disruption could trigger fuel shortages and price hikes.

Energy Minister Zhecho Stankov said the institution of a special administrator was first introduced in 2023 to ensure continued refinery operations when Lukoil resisted processing non-Russian crude. “Now we are in a different situation,” he said. “The new powers would allow 24/7 monitoring of the refinery and prevent funds from being diverted to sanctioned companies.”

GERB leader Boyko Borissov said a Bulgarian national has already been proposed for the position of special administrator, but the name would be announced only after the president’s veto is addressed.

Lukoil’s international troubles

Lukoil, which has been linked to President Vladimir Putin but also has publicly traded shares, faces mounting difficulties after the United States last week blocked its attempt to sell its foreign operations to commodities trader Gunvor. Washington said it would not issue a licence for Gunvor, calling it a “Kremlin puppet.”

Lukoil has until November 21 to divest or write off its international business, valued at an estimated €14bn.

In Bulgaria, the company’s assets include Lukoil Neftochim Burgas AD (the refinery), Lukoil-Bulgaria EOOD (a chain of over 200 petrol stations), Lukoil Aviation Bulgaria EOOD and Sustainable Energy Supply EOOD. The refinery is 89.97% owned by Lukoil’s Swiss-registered subsidiary LITASCO, with another 9.88% held by Lukoil Oil Company, and the remaining 0.15% distributed among more than 7,700 shareholders.

Radev warned that poor or opaque management under the new law could lead to lawsuits and a potential fuel crisis. “The law undermines Bulgaria’s reputation and could result in significant compensation claims against the state,” he said.

With US sanctions looming and Lukoil’s future uncertain, Sofia faces growing pressure to safeguard its energy security while complying with international restrictions on Russia’s oil sector.