The government’s push to potentially seize and sell Lukoil’s Burgas oil refinery to shield it from US sanctions hit a major roadblock Wednesday when Bulgarian President Rumen Radev vetoed the necessary legal changes.
President Rumen Radev, in a significant move, vetoed the recently passed legislation and returned it to the Bulgarian parliament for renewed deliberation, according to a Reuters report.
His decision was rooted in several critical concerns regarding the amendments, which he argued were fundamentally flawed.
Specifically, Radev stated that the proposed changes failed to incorporate adequate safeguards that would protect the Bulgarian state from potential future financial liabilities and claims.
Doubts
Furthermore, he asserted that the legislation was in violation of several provisions within Bulgaria’s constitution, thereby raising serious questions about its legality and adherence to the foundational legal framework of the nation.
Compounding these constitutional and financial risks, the President also warned that the current form of the legislation posed a tangible threat to the stability and integrity of the country’s public finances, suggesting a potential for economic disruption or unforeseen fiscal burdens.
His rejection, therefore, serves as a demand for the legislature to thoroughly revise the bill to address these multifaceted issues before it can be enacted into law.
Last Friday, Parliament adopted legal amendments that will allow a government-appointed special commercial manager to oversee the continued operation and potential sale of Lukoil’s refinery in Bulgaria.
This expansion of powers is significant because it extends the manager’s authority past November 21, the date when US sanctions are scheduled to take effect.
Radev said in a statement:
The scope of application of the law has been expanded unjustifiably and dangerously.
He further stated that the guarantees intended to mitigate the state’s potential future liability for claims had been inexplicably eliminated.
However, the president of Bulgaria holds a largely ceremonial role, as their veto can be overridden by the parliament.
Last month, the US and Britain imposed sanctions on Lukoil and Rosneft, Russia’s two largest oil companies, due to Moscow’s war in Ukraine.
These sanctions pose a threat to the companies’ extensive operations throughout Europe.
Bulgaria sought sanctions exemption from US body
On Wednesday, Bulgarian Energy Minister Zhecho Stankov informed parliament that Sofia submitted a request for a sanctions exemption to the US Office of Foreign Assets Control (OFAC) on October 27.
A crucial responsibility of the newly appointed state manager, according to Stankov, will be to implement continuous, 24-hour monitoring to prevent the diversion of funds from subsidiaries to the sanctioned entities.
Concerns are mounting over Bulgaria’s winter fuel supplies due to US sanctions targeting Lukoil.
Lukoil’s significant foreign operations in Bulgaria include the crucial Burgas refinery and numerous petrol stations.
Bulgaria guarantees the security of fuel supplies for household consumers, according to Stankov.
The country maintains reserves in its storage, including six months of petrol, four months of diesel, and two months of aviation fuel.
The speaker announced that four Bulgarian Lukoil companies, Lukoil Neftochim Burgas, Lukoil Bulgaria, Lukoil Aviation Bulgaria, and Lukoil Bulgaria Bunker, will be directly affected by US sanctions.
These sanctions will take effect following the suspension of banking services after November 21.
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