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Nov 20, 2023 12:12 EEST
November 20 (SeeNews) - Lukoil Neftohim Burgas, the operator of Bulgaria's sole oil refinery, said that an agreement reached between governing political parties to put an end to export quotas for products made from Russian seaborne crude oil imports would lead to a forced production halt and upset the local fuel market.
"The cancellation of export quotas for petroleum products that cannot be sold on the Bulgarian market, starting from January 1, 2024, is effectively equivalent to the repeal of the derogation as early as December 2023," Lukoil Neftohim Burgas, part of the European arm of Russia's Lukoil, said in a press release on Saturday.
The cancellation of export opportunities for certain products may lead to a swift overflow of the company's warehouses, forcing a production shutdown. This situation poses heightened technological and logistical risks for the refinery, putting fuel supplies to the Bulgarian market at risk, Lukoil Neftohim warned. It called on relevant institutions to engage in dialogue to reach a viable, risk-free solution.
On Friday, the two coalitions that form the government, GERB-UDF and WCC-DB, and the Movement of Rights and Freedoms (MRF) which supports the cabinet, reached an agreement on the gradual phase-out of the derogation, which the European Commission granted to Bulgaria in June 2022, allowing the country to import crude oil and petroleum products from Russia by sea until the end of 2024 and to export products based on Russian oil to third countries, including Ukraine.
The Burgas refinery will transition to processing non-Russian crude oil in two steps, GERB MP Dessislava Atanassova told public television BNT. Starting from January 1, 2024, Lukoil Neftohim's export quotas will be cancelled. Following that, the derogation on Russian crude imports will be definitively terminated as of March 1, 2024.
A draft bill on these amendments now before parliament needs the support of at least 121 members of the 240-seat National Assembly to pass. GERB-UDF, WCC-DB and MRF control 167 seats in parliament among themselves.
In September, parliament adopted legislative amendments which implement the EU sanctions against Russia in response to the war in Ukraine, prompting Lukoil Neftohim to caution against a potential market disruption as a result.
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