Bulgaria to Fork Out BGN 2 M after Quitting BA Pipe

Bulgaria will issue another 18 000 shares to cover expenses of Burgas-Alexandroupolis oil pipeline, the government decided on Wednesday without providing details.

The shares will be worth BGN 1.8 M to be used for covering costs before Bulgaria can conclusively withdraw from the project, the government said in a statement.

Earlier this month the finance minister in Sofia said that Bulgaria has paid all outstanding dues for its part in the Burgas-Alexandroupolis oil pipeline project and is free to quit it.

Bulgaria's contribution to the project totaled EUR 1.421 M in 2008 and was paid in that year. The contributions for 2009 and 2010 – EUR 4.876 M and EUR 1.323 M respectively - were transferred in February 2012. The outstanding dues in 2011 amounted to EUR 171.5 thousand and were paid at the beginning of last year.

Bulgaria's Finance Minister Simeon Djankov has expressed confidence that the withdrawal will not force the country to pay anything more than its EUR 6 M outstanding dues on the project, which accrued during its advance financing. The sum has been transferred at the beginning of February 2012.

Russian Energy Minister Sergey Shmatko however has warned his country will take all legal measures available to make Bulgaria pay indemnities over the Burgas-Alexandroupolis oil pipeline project.

The Bulgarian government said in December last year that it will leave the project, which involved building a pipeline through Bulgaria and Greece to transport Russian oil from the Black Sea to the Aegean, bypassing the Bosphorus.

The government said it is quitting the project as not economically efficient, after months of sending negative signals as to its commitment to it.

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