KazMunayGas Misses Chance to Buy Bulgarian Oil Refinery from Russian Company

KazMunayGas has dropped out of the contenders to purchase the refinery in Burgas, Bulgaria. Russia's Lukoil owns it. Since the beginning of the year, the refinery has been purchasing Kazakhstan's oil, and KMG was considered a likely buyer, Orda.kz reports.

According to the Financial Times, Lukoil will sell the Burgas refinery not to KazMunayGas but to an international Qatari-British consortium involving Oryx Global and DL Hudson. 

This concerns transferring a controlling stake in the Lukoil Neftokhim Burgas oil refinery, a critical Bulgarian refinery on the Black Sea coast. The deal is set to be completed by the end of the year, but President Vladimir Putin needs to approve it.

The amount that will be paid for the enterprise is unknown.

After the European Union imposed a ban on oil imports from Russia amid Russia's invasion of Ukraine, it became problematic for Lukoil to operate in Bulgaria:

In 2023, the Bulgarian government increased the profit tax for Lukoil Neftokhim Burgas to 60%, imposed a fine of 87.5 million euros for abuse of a dominant position in the market and terminated the concession agreement for the Rosenets oil terminal near the port of Burgas, through which the refinery was supplied with raw materials,recalls oil industry expert Oleg Chervinsky . 

Since the plant purchased almost half of the oil processed in Burgas from Kazakhstan, KazMunayGas was named a potential buyer. Having its refinery in Bulgaria would have significantly simplified KMG's oil processing and the volume of oil product deliveries via the Black Sea.

The Azerbaijani national company SOCAR and the Turkish group Opet were other potential competitors. A dozen corporations showed interest in purchasing the enterprise.

Original Author: Nikita Drobny