Lukoil Woes in Bulgaria May Be Linked to Delayed N-Plant

Valentin Zlatev, General Director of Lukoil Bulgaria, has often been described as "the country's back seat ruler" and "the oil oligarch, who pulls the strings of the government". Photo by Sofia Photo Agency

A link between Bulgaria's troubled ties with Russia's oil major Lukoil and state nuclear company Atomstroyexport can not be ruled out, according to insiders.

"It is possible that politicians are undertaking certain maneuvers in a bid to achieve connected benefits. Russia's diplomats have the habit of promoting this type of ties,," Ilia Vassilev, former ambassador in Moscow, told the national state radio.

His statement came hours after Bulgaria's Neftochim refinery, the only in the country and controlled by Russia's giant Lukoil, started on Wednesday to reduce crude processing to effectively stop production after the customs office revoked its licenses.

Members of Russian oil major Lukoil management have urgently arrived in Sofia for talks over the revoked licenses of its refinery in Bulgaria to sell fuels, according to the former ambassador.

Vassilev said that unlike the period after 1999 now the relations between Lukoil, the Bulgarian state and the customs office are going back to normal, with more regulations introduced.

"I think it was not a very good decision to rise sharply the prices of petrol and diesel by 0.03-0.04 levs.. This simply was not a manifestation of good taste," Vassilev said.

At the end of last week Russia's state nuclear company Atomstroyexport took Bulgaria's NEK to an arbitration court for EUR 58 M over delayed payments for its work on two nuclear reactors.

The next day the Bulgarian company said it is ready to strike back with a EUR 61 M counter claim against Atomstroyexport over delayed payments for purchases of old equipment for the plant, worth about EUR 300 M.

Russian media has commented that in case of failure of the project, trials may continue for several years and claims could tower to EUR 1 B.

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