Russian refinery in Bulgaria boosts imports of Kazakhstani oil after supplies from Russia were banned

An oil refinery in Bulgaria run by Russian oil company Lukoil has boosted imports of Kazakhstani oil after the country was banned from purchasing oil from Russia, according to Vedomosti, a Russian business media outlet.

In May 2024, Kazakhstan became the biggest oil supplier in Bulgaria as Lukoil Neftohim Burgas was purchasing about 80,400 barrels of Kazakhstani high-sulfur oil Kebco and a lighter CPC Blend per day, which was an eightfold increase compared to January.

Overall, in May, the facility acquired 130,000 barrels per day, the highest rate since the beginning of the year. However, the refinery’s capacity is much higher as it can process 195,000 barrels per day.

Kazakhstan supplied oil along with Iraq (42,100 barrels per day) and Libya (29,100 barrels per day). Moreover, the refinery in Bulgaria occasionally purchases medium sour crude from the Johan Sverdrup oil field in Norway (34,400 barrels per day in April).

Lukoil hasn’t been supplying oil to the refinery since early 2024. Even though the EU has permitted Bulgaria to buy oil from Russia until the end of the year, in late 2023 the country’s parliament adopted a law banning the export of Russian oil starting from March 1, 2024.

In October 2023, the Financial Times reported that the Ministry of Finance of Bulgaria had introduced a 60% tax for the refinery. The tax was supposed to be lowered to 15% if the facility was sold to an international company.

The plant in Burgas is the only major oil refinery in Bulgaria. Lukoil bought it in 1999 and has invested $3.4 billion in it since then. The facility produces fuels for vehicles, liquified hydrocarbon gas and polymers. The company also runs a network of 220 gas stations all over the country, nine oil depots, as well as a business related to maritime and aviation bunkering.

Several experts Vedomosti talked to said that the sale of the plant is «inevitable,» although it won’t be an easy task: any potential buyers would ask for a big discount, while Lukoil may struggle with withdrawing funds it would gain after a deal.

In late 2023, Azerbaijani Ambassador to Bulgaria Huseyn Huseynov said that Azerbaijan was ready to think about purchasing the refinery if the country received a corresponding offer. Moreover, American Aecus Inc. controlled by Dimitrios Dotsios, a Greek businessman, is also interested in acquiring the plant, according to Intelligence Online, a French media outlet. In turn, Lukoil hasn’t ruled out that it would put the refinery up for sale.