Bulgarian Cabinet asks Parliament for Bourgas-Alexandroupolis exit

Written by on February 6, 2013 in Bulgaria, Business, News - No comments

Bulgaria’s Cabinet said on February 6 that it has filed an motion in Parliament to exit the intergovernmental agreement with Russia and Greece for the construction of the Bourgas-Alexandroupolis oil pipeline.

The motion comes after “the expiration of the offer made by Bulgaria to terminate the document by mutual agreement,” the Government’s media office said in a statement.

In December 2011, Bulgaria announced its intention to exit the project, with Finance Minister Simeon Dyankov saying that the proposed pipeline could no longer be built under the terms of the agreement.

The announcement came as a surprise, with Bulgaria’s Environment Ministry giving its preliminary approval of the environmental impact study just a month earlier.

Of the three “energy grand slam” projects signed by former Bulgarian president Georgi Purvanov with Vladimir Putin, then president of Russia, in January 2008 (along with South Stream gas pipeline and Belene nuclear station), the oil pipeline was always regarded as the least likely to come to fruition once the tripartite government coalition engineered by Purvanov gave way to the current Cabinet in July 2009.

Never outright cancelling the projects, the Government of Prime Minister Boiko Borissov made it clear that it was unhappy with the lack of financial (and financing) details in the framework agreements signed by Purvanov and Putin.

The costs of Bourgas-Alexandroupolis, in particular, were never clear, although most estimates said that the 280km pipeline – envisioned to pump an initial 35 million tons of oil a year, rising to 50 million tons at full capacity – would cost between one billion euro and 1.5 billion euro to build.

It also engendered the most vigorous opposition in local communities, where the residents feared the prospect of an oil spill that would obliterate the region’s main industry, tourism. Several local referendums showed public opinion was opposed to the pipeline, but such polls have no legal clout to scupper the project.

The terms of the intergovernmental agreement allowed Bulgaria to exit it unilaterally, Dyankov said at the time of the announcement. But before doing so, it offered the other two countries a year to mutually terminate the deal, a deadline that expired in December 2012.

(Vladimir Putin, left, then prime minister of Russia, last visited Sofia in November 2010, meeting his Bulgarian counterpart Boiko Borissov, right, to discuss a host of issues, including the future of joint energy projects. Photo: government.bg) 

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Alex Bivol is the news editor of The Sofia Globe.