Bulgaria’s Parliament legislates rules on sale of Lukoil refinery, subsidiaries

Bulgaria’s National Assembly approved on October 24 the second and final reading of amendments to the Investment Promotion Act that provide that the Lukoil refinery in Bourgas and the company’s subsidiaries may be sold only after clearance from the State Agency for National Security (SANS) and the Cabinet.

The second reading of the amendments was put on Parliament’s Order Paper urgently following the United States Treasury Department announcement on October 22 of US sanctions on Lukoil and Rosneft, which the Bulgarian government confirmed on October 23 affected the refinery in Bourgas and other Lukoil assets in Bulgaria.

The vote on the amendments was 119 in favour, 70 against, with two abstentions.

The amendments, which were approved at first reading on October 9, were backed at second reading by Bulgaria’s de facto ruling majority – GERB-UDF, Delyan Peevski’s Movement for Rights and Freedoms – New Beginning, the Bulgarian Socialist Party – United Left, and populist ITN, as well as one MP from the Ahmed Dogan loyalists of the Alliance For Rights and Freedoms and three non-aligned MPs.

Sale of shares of Lukoil Bulgaria, Lukoil Neftochim Bourgas, Lukoil Aviation Bulgaria, and Sustainable Energy may only take place after approval by SANS and the government.

The amendments were opposed by those who see them as geared to benefit Magnitsky Act-sanctioned Peevski.

Ivailo Mirchev, co-leader of Yes Bulgaria – part of the opposition We Continue the Change – Democratic Bulgaria coalition – said that the amendments benefit Peevski because it makes SANS the gatekeeper of any deal on Lukoil and, according to Mirchev, Peevski controls SANS.

Commenting on a scuffle in the morning’s sitting between MPs from MRF – New Beginning and pro-Russian opposition party Vuzrazhdane, Mirchev said that the confrontation was intended to distract from the substance of the matter.

“These are theatrical performances, there was a provocation of a Peevski MP, a frank insult to another MP, and this is being done intentionally, because what is currently being considered is an amendment that serves Peevski,” Mirchev said.

“It has nothing to do with the sanctions regime regarding Lukoil. It gives the person who controls SANS the opportunity to stop the deal itself and the deals of the companies listed there,” the WCC – DB MP said.

“He cannot swallow up all of Lukoil, even though he managed to swallow up Boiko Borissov, obviously he cannot swallow all of Lukoil, he wants part of the deal.”

“He wants a part of the deal, by extorting the buyer and the seller through the institutions of the conquered state. This is the goal and that is why this amendment is being adopted today,” Mirchev said.

Yes Bulgaria co-leader Bozhidar Bozhanov said that Peevski’s plan for Lukoil envisages taking advantage of the tense situation with US sanctions, the interest from various buyers and the key role of the SANS that he controls in the sale.

According to Bozhanov, the leader of “New Beginning” will blackmail the buyer and demand a minority stake for himself through a fund or an offshore company.

“In the end, Lukoil will end up with a hidden minority co-owner, Peevski, who may even give a little to Boiko Borissov, so that everyone is happy – just like with Bulgartabac. This is the mechanism by which Peevski will use this change to take a minority stake in Lukoil,” Bozhanov said.

Mirchev added that over the past few years, it was Borissov who had held at least several meetings with senior US representatives in an attempt to free Peevski from the Magnitsky sanctions.

“Peevski and Borissov are trying to negotiate Peevski’s exit from Magnitsky through the deal with Lukoil and the Turkish Stream gas pipeline.

“Boiko Borissov, especially in the past two years, has had at least several meetings with people in Bulgaria who have strong influence in Washington with the main appeal ‘Let’s do something to get Peevski out of Magnitsky’,” Mirchev said.

Vuzrazhdane MP Yordan Todorov said that the way the amendments were written “the Cabinet does not have the right to approve the deal, even if they want to, before SANS has approved the deal”

“Why exactly is SANS given this task – because SANS is directly under Peevski’s command and SANS will prepare exactly the kind of report that Peevski wants to be prepared,” Todorov said.

MPs from populist-nationalist parties Mech and Velichie also spoke against the amendments.

On October 24, Prime Minister Rossen Zhelyakov held an emergency meeting with selected Cabinet ministers and heads of security services to discuss the US sanctions on Lukoil and Rosneft.

The meeting was attended by Interior Minister Daniel Mitov, Energy Minister Zhecho Stankov, Finance Minister Temenuzhka Petkova, Justice Minister Georgi Georgiev, and Economy Minister Petar Dilov, as well as the head of Parliament’s budget and finance committee, Delyan Dobrev.

Stankov and Georgiev issued a joint statement after the meeting, with Stankov saying that “the government has clear plan of action”.

“I will activate this plan related to the supplies of oil and petroleum products,” Stankov said.

He said that the first phase is related to inspection and monitoring, where all quantities will be reviewed, and the second phase is related to preventive measures.

“Bulgarian citizens should be calm, fuel is provided for their consumption, and to the end of the year these quantities are fully guaranteed ,” he said.

(Photo: parliament.bg)