Bulgaria and Romania Move to Seize Lukoil Assets as Iraq Halts Payments amid Sanctions
SOFIA, bulgaria/BUCHAREST, Romania – In a significant blow to Russia’s energy revenue stream, both Bulgaria and Romania are taking steps to seize control of Lukoil’s assets within their borders, following a decision by Iraq to halt all cash and crude oil payments to the Russian oil giant due to international sanctions.The moves threaten the operation of key refineries and fuel distribution networks across the Balkans and beyond.
According to reports citing unnamed sources, Iraq has canceled planned payments for approximately 4 million barrels of crude oil to Lukoil. an Iraqi oil ministry official stated that payments will remain frozen untill a contractual adjustment is made to establish a mechanism for oil field development and payments to non-sanctioned companies.
The most immediate impact is felt in Bulgaria, where the government is moving to take control of the Neftochim refinery in Burgas, the largest in the Balkans and Bulgaria’s largest company overall.Lukoil holds a 99.85% stake in the refinery. The Bulgarian government aims to prevent the refinery’s closure, given its quasi-monopoly position thru its associated network of oil depots, gas stations, and fuel suppliers for ships and aircraft.
romania is following suit, with Energy Minister Bogdan Ivan announcing the country must also take control of Lukoil’s romanian subsidiary. While details are still emerging, the move impacts Lukoil’s 320 gas stations, the country’s third-largest refinery, and ongoing exploration of gas reserves in the Black Sea.
These actions come as Lukoil attempts to divest its foreign assets – encompassing hundreds of gas stations in roughly 20 countries and several refineries – before a November 21st deadline. A potential sale to Swiss energy trader Gunvor recently collapsed after the U.S. Treasury Department labeled Gunvor a “puppet of the Kremlin” and signaled opposition to the deal. The U.S. Treasury stated on Platform X that Gunvor would not receive a license “provided that Vladimir Putin continues the ‘senseless murder.'”