Parliament adopted on Friday on first and second reading amendments to the legislation on control of the implementation of restrictive measures in view of Russia’s actions destabilising the situation in Ukraine. The changes were supported by GERB-UDF, Continue the Change – Democratic Bulgaria (CC-DB) and the Movement for Rights and Freedoms (MRF), while Vazrazhdane and BSP voted against, and There Is Such a People (TISP) did not participate in the vote.
The concessions awarded for carrying out activities at strategic sites of national security importance affecting oil and petroleum products made from crude oil originating in Russia or exported from Russia shall be terminated within one week, the MPs decided. The amendments effectively terminate Lukoil’s concession for the port of Rosenets.
In 2011, a contract was signed with the joint-stock company Lukoil Neftohim Burgas for the concession of the port terminal Rosenets (part of the port for public transport of national importance – Burgas). The concession is for a period of 35 years.
Within two weeks of the termination of the concession, the Ministry of Transport and Communications will take over the operational management of the facility, the MPs also decided.
In the course of the debate, BSP for Bulgaria and Vazrazhdane expressed concerns about oil supplies after the concession is terminated, as well as worries that a lawsuit could be filed against Bulgaria. The ruling GERB-UDF and CC-DB, as well as the MRF pointed out that the termination of the concession was the result of a European regulation that had to be respected. Vazrazhdane announced that they would appeal to the Constitutional Court, as they did for the referendum on preserving the Bulgarian lev.
“On the grounds that we had only said we would propose changes between the two readings, without specifying them, they [GERB-UDF, CC-DB and MRF] decided they could vote on the bill in two readings in one sitting, the leader of Vazrazhdane said, adding that his party will refer the matter to the Constitutional Court.
Rosenets Oil Terminal Concession: Timeline
On July 19, three parties in Parliament said they would move for terminating the concession of the Lukoil Neftochim Burgas refinery for the Rosenets oil terminal. The idea is backed by Continue the Change – Democratic Bulgaria, GERB-UDF and the Movement for Rights and Freedoms. The plan drew strong criticism from President Rumen Radev. The Burgas oil refinery said they would take the matter to court to defend their business reputation.
Following is a timeline for the concession.
September 10, 2004 – Lukoil Neftochim Burgas applies for a concession by right over the Rosenets port terminal.
March 22, 2011 – The Council of Ministers grants a concession as requested, under the Bulgarian Maritime Spaces, Inland Waterways and Ports Act. The concession is for 35 years – until 2046. The concession is for a service: for management and maintenance of the facility against a right and responsibility to provide port services.
May 12, 2011 – A concession agreement is signed. It provides for a lump sum payment of BGN 977,915 pre-VAT. The annual remuneration consists of two components – a fixed component of EUR 385,000, which is updated every three years, and a variable component.
July 22, 2011 – By a decision of the Customs Agency Director, Vanyo Tanov, the Lukoil Neftochim licences for the management of tax warehouses and the Rosenets oil terminal are revoked over failure to comply with the rules. Lukoil appeals in court.
July 27, 2011 – Teams of the Customs Agency enter Lukoil Neftochim Burgas and start to take inventory to see how much excise duty and VAT the company owes.
August 1, 2011 – Sofia Administrative Court suspends the anticipatory enforcement of the decision of July 22, 2011 of the Customs Agency Director for revoking the license of Lukoil Neftochim to operate a tax warehouse for the production and storage of excise goods. Enforcement is suspended until the conclusion of the court proceedings on Lukoil’s appeal.
August 2, 2011 – Following an order by the Director of the Customs Agency, Vanyo Tanov, the customs seals on the facilities at Lukoil Neftochim Burgas and at the Rosenets oil port are removed and the normal technological regime of the installations is gradually restored and oil imports and fuel shipments are resumed.
August 31, 2011 – Sofia Administrative Court holds first hearing of the case opened after Lukoil challenged the revoking of its licence.
January 24, 2012 – At a court hearing on the case, it transpires that on January 23, 2012 Lukoil and the Customs Agency had reached an agreement and the refinery gets its license reinstated by the court. According to the agreement, Lukoil undertakes to bring its tax warehouses into compliance. The decision of the Administrative Court is final. Cases is dismissed.
January 23, 2012 – A certificate was issued certifying that the tax warehouse Rosenets Oil Terminal uses measurement and control devices that transmit data electronically to the Customs Agency, the information being sufficient to ensure control of excise goods entering and leaving the warehouse.
April 22, 2013 – The license of Lukoil Bulgaria to operate a tax warehouse is revoked by an order of the Director of the Customs Agency. The decision follows checks of the compliance of the control devices at the tax warehouse with the applicable regulation.
March 31, 2013 – the deadline for Lukoil Bulgaria Ltd to bring its operations into compliance expires.
April 15, 2023 – The Customs Agency notifies Lukoil Bulgaria that the metering devices installed are not transmitting data to the Customs Agency’s information system and that there is a mismatch between the register data and the warehouse stock. Prior to that, an on-the-spot inspection by Customs inspectors found that one of Lukoil Bulgaria facilities had no metering devices installed and that another was not connected with the Customs Agency.
July 13, 2020 – The Supreme Administrative Prosecution Office instructs Rosen Zhelyazkov, Minister of Transport, Information Technology and Communications, to launch an immediate inspection of the concession of the Rosenets port terminal.
February 24, 2022 – the government decides to terminate the concession and ask the Burgas refinery to sell only domestically fuels derived from Russian oil, for which the State has obtained an exemption from the EU embargo.
October 6, 2022 – Acting on a proposal by Prime Minister Galab Donev, the caretaker cabinet allows Lukoil to keep its concession of the Rosenets oil port for another 24 years until 2046 despite the EU sanctions against Russian concessions following its invasion of Ukraine on February 24, 2022.
December 2, 2022 – MPs from the Democratic Bulgaria (DB) parliamentary group submit a bill to the National Assembly allowing the state to impose operational control over Lukoil Neftochim Burgas. The law goes through on first reading on December 29, 2022 and on second reading on January 13, 2023.
February 24, 2022 – The government decides to terminate the concession and to instruct the Burgas refinery to sell only in the country its fuels obtained from Russian oil, for which the state has obtained an exemption from the EU embargo.
October 6, 2022 – Prime Minister Galab Donev’s caretaker cabinet allows Lukoil to remain concessionaire of the Rosenets oil port for another 24 years until 2046 and to complete the contract despite the EU sanctions against Russian concessions following the war in Ukraine that began on February 24, 2022. The draft decision was introduced by Prime Minister Galab Donev.
December 2, 2022 – MPs from the Democratic Bulgaria (DB) parliamentary group submit a bill to the National Assembly allowing the state to impose operational control over Lukoil Neftochim Burgas. The law was passed at first reading on December 20, 2022 and at second reading on January 13, 2023 by the 48th National Assembly (which runs until 2 February 2023).