Lukoil Group's Litasco Threatens Bulgaria with Arbitration

Litasco, the Swiss-based owner of part of the Bulgarian assets of the Russian oil company Lukoil, has threatened Bulgaria with arbitration proceedings over the appointment of a special commercial manager. The warning was issued in a press release by the company on February 25.

Litasco cited a bilateral investment treaty between Bulgaria and Switzerland. It argued that, once the state assumed control over Lukoil’s assets in the country, it was obliged to compensate the owner.

The special commercial manager appointed to oversee Lukoil’s six Bulgarian subsidiaries — including the refinery in Burgas — is Rumen Spetsov, a former head of the National Revenue Agency.

He was appointed by the government of Rosen Zhelyazkov in response to sanctions imposed by the United States and the United Kingdom on the Russian companies Lukoil and Rosneft.

In November, there were concerns that the country’s largest refinery could suspend operations. Lukoil is currently in talks with investors regarding the sale of its foreign assets, including those in Bulgaria.