The Hungaria's MOL has submitted a bid for Lukoil Neftochim. The company is one of the participants in the tender, Hungarian Prime Minister, Viktor Orbán, said during his annual press conference, where he extensively discussed the topic of Russian gas. As reported by "Politico," Kremlin-friendly EU leaders, including Orbán and Slovak Prime Minister, Robert Fico, are seeking a deal to maintain the flow of Russian fuel through Europe. The transit agreement through Ukraine, which Kyiv has repeatedly confirmed it will not renew due to Russian aggression, expires on January 1.
Lukoil is a strategic asset for Bulgaria, where the state holds a "golden share," and one member of the company's Supervisory Board is nominated by the Minister of Economy. In late November, this representative was replaced. According to the rules governing Lukoil Bulgaria, any sale or change in majority ownership requires the approval of the Commission for Protection of Competition (CPC) and the State Agency for National Security (SANS). Additionally, the state reserves the right to appoint a special manager to the company who, under certain circumstances, will be able to take control of Lukoil.
SALE OF LUKOIL'S REFINERY IN BULGARIA
- The Hungarian company MOL will participate in the tender.
- An attempt to preserve Russian fuel flows in Europe?
- 1 January 2025, the transit contract through Ukraine expires.
THE LUKOIL REFINERY IN BULGARIA
- The state owns a "golden share".
- One member of the Supervisory Board is proposed by the Minister of Economy.
- Sale requires approval from CPC and SANS.
- Bulgaria has the right to appoint a special manager.
Bulgaria and Romania have proven to be key to Viktor Orbán's energy plans, including the potential acquisition of Lukoil's refinery in Burgas. During his press conference, Orbán confirmed that he had received guarantees that Bulgaria would not be an obstacle to Hungary's gas supplies.
"Lukoil, a private Russian company, is looking to sell one of its refineries. The Hungarian company MOL is one of seven participants in the open tender and the only one from the EU. The decision will be made by the Bulgarians," said Viktor Orbán, Prime Minister of Hungary.
Orbán is exploring options to secure sufficient gas supplies following the halt of Russian flows through Ukraine. The pipeline, one of the last major gas routes to Europe, will close after Kyiv's refusal to extend a five-year Russian gas transit contract that supplies Slovakia, the Czech Republic and Austria.
Hungary is in talks with Russia and Ukraine to keep gas supplies open, although Russian gas imports to Budapest currently go through Turkish Stream. According to the Hungarian Prime Minister, the solution lies in the wording - he believes that once Russian gas enters Ukrainian territory, it is now owned by the buyers, which means it can be Hungarian gas as well.
This year Hungary has imported 7.5 billion cubic metres of Russian gas through the Turkish Stream pipeline and additional quantities through Romania.
Slovak Prime Minister Robert Fico - also friendly to the Kremlin - has warned of a gas crisis as a result of the suspension of transit through Ukraine. However, according to Politico, Kiev accuses Slovakia of benefiting from the transit of Russian gas.
The publication cites a source close to President Zelensky, who claims that Slovakia plays a key role in seeking a workaround solution. It is alleged that Slovakia earns approximately $500 million annually from the trade in Russian gas.
The EU, aiming to diversify its energy supplies, has increased imports of U.S. gas and oil since the beginning of Russia's invasion of Ukraine.
"The EU is committed to gradually phasing out energy imports from Russia and diversifying its sources. There is great complementarity between the EU and the U.S., and we seek constructive partnership with the new U.S. administration, including on energy issues," said Olaf Gill, a spokesperson for the European Commission.
According to Eurostat, the U.S. supplied 47% of the total liquefied natural gas (LNG) imported by the EU in the first quarter of this year. Most European refineries and companies are privately owned, and governments do not determine where supplies come from, despite the threat of sanctions or tariffs.
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