Bulgaria Appoints Special Manager for Lukoil Refinery to Safeguard Fuel Security Amid US Sanctions

Parliamentary Action Secures Lukoil Refinery Operations

The Bulgarian Parliament has taken decisive action to ensure the stability of the nation's fuel supply, approving amendments to the Law on the Administrative Regulation of Economic Activities Related to Oil and Oil Products. These changes, passed on November 7, 2025, grant sweeping powers to a future special manager for the Lukoil Neftochim Burgas refinery.

Deputy Speaker of Parliament Kostadin Angelov affirmed on November 9, 2025, that the decision to appoint a special manager is crucial for guaranteeing fuel supply stability and protecting Bulgaria's national interest. Angelov stated, 'This decision was taken to protect the national interest, to protect Bulgarian citizens and to ensure that there will be no problem after these sanctions come into effect after November 21'.

Response to Impending US Sanctions

The parliamentary move comes as a direct response to US sanctions imposed on Russian oil giants, including Lukoil, which are scheduled to take effect on November 21, 2025. Bulgarian authorities anticipate that these sanctions could effectively lead to the shutdown of the Lukoil Neftochim Burgas refinery's operations, as counterparties may refuse to process payments to Lukoil-owned companies.

The Lukoil Neftochim Burgas refinery, located in Burgas, is the largest oil refinery in the Balkans and has been owned by Lukoil since 1999. Lukoil indirectly holds 99.85% of the refinery. The facility is a critical asset, supplying up to 80% of Bulgaria's fuel and standing as the country's largest company with a turnover of €4.68 billion in 2024.

Extensive Powers for the Special Manager

The newly approved legislation grants the special manager comprehensive authority over the refinery's operations. Key aspects of this role include:

• Full Operational Control: The manager will assume complete control over Lukoil's operations from the moment of appointment, effectively stripping shareholders and owners of their authority.
• Asset Management: The manager can dispose of or alienate company assets beyond ordinary business, provided there is prior approval from the Council of Ministers. Any transactions made in violation of this rule will be deemed null and void.
• Share Sales: In cases involving the sale of shares or stakes, a market valuation will be mandatory, requiring both government approval and prior consent from the State Agency for National Security (SANS).
• Financial Safeguards: Proceeds from any sales will be deposited into a special account at the Bulgarian Development Bank (BDB), with assurances that funds will be returned to the owners once sanctions are lifted.
• Immunity from Review: The manager's actions are explicitly stated not to be subject to judicial or administrative review.

Government's Stance and Opposition Concerns

Prime Minister Rosen Zhelyazkov underscored that these actions are preventive measures aimed at safeguarding the country's critical infrastructure and ensuring full compliance with US sanctions, preventing funds from reaching the war in Ukraine. The government's rationale centers on ensuring energy security, preventing supply disruptions, and avoiding secondary sanctions.

Despite the government's assertions, the rapid passage of the legislation drew criticism from opposition lawmakers. Concerns were raised regarding the potential for legal action against Bulgaria by Lukoil, with some suggesting that such an outcome could lead to funds ultimately benefiting Russia. Deputy Speaker Angelov, however, dismissed these opposition attacks, characterizing them as 'more pro-Kremlin than pro-Bulgarian'. The 'German model' for managing sanctioned assets was cited as an inspiration for the Bulgarian legislative framework.