Bloomberg Claims KazMunayGas Still in Running to Buy Bulgarian Refinery

Kazakhstan's national oil company KazMunayGas (KMG) remains in contention to acquire Lukoil's refinery in Burgas, Bulgaria, despite earlier reports suggesting otherwise, according to BNN Bloomberg.

Citing two sources, Bloomberg reports that KMG is discussing financing options with the Vitol group, Kazakhstan's primary oil trader.

If successful, the potential deal, valued at approximately $1 billion, could be completed within a month. A key condition of the sale is that no funds would be transferred to Russia.

Financial analyst Jonathan Lamb views the potential acquisition as favorable for KMG, noting that the Burgas refinery would operate outside Kazakhstan's production quota system.

The purchase would also double KMG's European refining capacity, with the billion-dollar price tag considered relatively low.

European countries have increased importing of Kazakhstan's oil, purchasing about 80% of oil shipped through the CPC pipeline. 

Bulgaria, which banned Russian oil imports in January 2024, has increased its imports of Kazakhstan's oil to 40% of its supply. 

Lukoil decided to sell its Burgas refinery, citing "discriminatory laws and unfair, politically motivated decisions."

While the Financial Times reported in November that KMG had withdrawn from the bidding process in favor of a Qatar-British consortium, Litasco, the refinery's main shareholder, quickly denied these claims.

KMG, Lukoil, and Bulgaria's Ministry of Energy have not commented on the potential deal.

Original Author: Nikita Drobny