Page 90 - SE Outlook Regions 2023

capacity of 1.61 GW of the total 3.85 GW capacity of all coal-fired
power plants.

38% of the €6.6bn Bulgaria should receive under the Recovery and
Resilience Plan would be used for the transition from coal to green
energy.

However, in order to start receiving the EU funds, Sofia must implement
significant reforms, which would require the appointment of a stable
regular government.

The country, which was almost completely dependent on Russia for its
natural gas imports, was cut off by Gazprom at the end of April as the
former pro-Western reformist government led by Kiril Petkov refused to
pay in rubles. Petkov’s government managed to quickly find alternatives
to the Russian gas, securing the delivery of several tankers with
liquified natural gas (LNG) from the US. However, its successor, Golub
Donev’s caretaker cabinet, decided not to accept the tankers, claiming
it was unable to find free slots to unload them.

Petkov also forced the completion of the Greece-Bulgaria gas
interconnector, which allowed the import of 1bn cubic metres of cheap
gas from Azerbaijan – one third of the country’s annual consumption.

Soon after taking office, Donev’s government made quick efforts to
bring Bulgaria back to the Russian orbit, including by trying to persuade
Gazprom to resume deliveries. These efforts have failed so far.

At the same time, Donev’s government is attempting to find a way to
avoid the EU sanctions on the sale of petroleum products produced
from Russian oil. In November, the government said it had accepted an
offer from Lukoil Neftochim Bulgaria to start paying taxes to the country
as of January 2023 if Sofia agrees to sell its products on the EU market.
According to the agreement between the government and Lukoil
Neftochim Bulgaria, the refinery can sell its products in the EU until the
end of 2024 as long as it starts paying profit taxes in Bulgaria. However,
in order to secure that, Lukoil Neftochim would need Russian oil.
Bulgaria was allowed in June to keep buying oil from Russia for two
years so that it can get enough time for the Lukoil Neftochim refinery to
adjust its equipment to produce fuels from liquified natural gas. But the
European Commission has repeatedly pointed out that this oil can only
be used within the country and not sold in the EU.

In December, the Movement for Rights and Freedoms (DPS) suggested
that the country could nationalise Lukoil Neftochim. The plan was
criticised by Democratic Bulgaria which suggested this could be an
attempt by the DPS to take over the refinery. Democratic Bulgaria
proposed another draft bill that would allow the country to take over
Lukoil’s operations.

Also in December, Donev’s government decided to ban exports of oil
products made from crude oil imported from Russia by sea as of March
5, 2023. The ban concerns Bulgarian exports of oil products to buyers
in another EU member state or a third country but will not apply to
petrochemicals or bunker fuel used in ships.

90 SE Outlook 2023 www.intellinews.com