Page 5 - FSUOGM Week 04 2023

FSUOGM COMMENTARY FSUOGM

The Ploesti refinery in
Romania.

Furthermore, Lukoil’s operations in Europe Bulgaria successfully secured a two-year deroga-
have been far less affected than those of its state- tion, ensuring that Lukoil could continue send-
owned counterparts. The company continues to ing its own oil to the facility. Burgas supplies half
operate hundreds of fuel filling stations, three of Bulgaria’s fuel needs.
refineries in Italy, Bulgaria and Romania, and Refined products produced at the refinery are
a 45% stake in another one in the Netherlands. designated for the domestic fuel market and can
It also controls a trading arm based in Geneva, only be exported to Ukraine. According to Polit-
called Litasco. ico, Lukoil is selling 32,000 barrels per day (bpd)
Litasco has suffered as a result of the crisis, of gas oil from the plant to Ukraine, although
with banks withdrawing their credit lines and there is a “very high risk" of smuggling to other
Lukoil being forced to spend “$1bn or more” EU markets.
to clear the subsidiary’s liabilities, according to From January to November of last year, Bul-
Politico. The company now only sells Russian garia exported €700mn of fuels to Ukraine, data
oil and gas products, and is considering relocat- published by the Bulgarian National Statistical
ing to Dubai, the news agency reported, citing Institute showed, according to Euractiv. All that
sources. supply came from Burgas, the country’s sole
Because of difficulties caused by sanctions, refinery, and mostly comprised gas oil.
Lukoil also struck a deal to sell its Italian refinery Still, Lukoil’s operations in Bulgaria may also
to an Israeli-backed private equity fund G.O.I. face headwinds in the future. Bulgaria’s parlia-
Energy, backed by Geneva-based trading giant ment passed a law this month enabling the gov-
Trafigura in January. But its Russian counter- ernment to take control of the Burgas refinery in
parts have suffered far more. Germany confis- the event of a threat to national security.
cated Rosneft’s Schwedt refinery last year and Romanian media have reported that Lukoil
Gazprom unit Gazprom Germania, preventing could sell its business there as well as its other
them from simply divesting. operations in neighbouring Moldova. Lukoil
As of yet, though, Lukoil has not reached owns 315 filling stations in Romania along with a
similar agreements for the sale of assets in other refinery in Ploiesti, and is the third largest player
European countries. Its position is seen as most in the country’s fuel sales market. In Moldova, it
entrenched in Bulgaria, where it has long held occupies about 20% of the retail fuel market, and
a monopoly position. When EU countries in also handles 40% of diesel imports and 33.5% of
December banned seaborne Russian oil imports, gasoline imports into the country. ™

Week 04 25•January•2023 www. NEWSBASE .com P5