Bulgaria has long been one of the most vulnerable countries in Europe to Russian influence operations. Since Russia’s full-scale invasion of Ukraine in February 2022, the Bulgarian President and successive government have consecutively tried to undermine the EU’s response to the Kremlin aggression: (i) restart negotiations with Gazprom; (ii) undermine the EU oil embargo though an unnecessary derogation for the national refinery; and most recently, (iii) threaten to veto sanctions on Russia’s state-owned nuclear sector.
The Bulgarian government fought hard to win a derogation from the EU oil sanctions – and won. Consequently, the largest Bulgarian company, Lukoil’s Neftochim Burgas refinery and petrochemicals complex, may continue processing Russian oil and selling the refined products to Bulgarian and/or Ukrainian consumers. Successive Bulgarian governments, including the current caretaker cabinet have been falsely claiming that without the derogations the refinery would not be able to operate and the country would not have adequate supplies of refined products. In reality, a shutdown risk for the Lukoil refinery exists only if the refinery continues to operate exclusively on Russian feedstock. The financial and political interest defended by the Bulgarian government are not those of Bulgarian consumers, but rather those of Lukoil and the Kremlin. For each barrel processed at Neftochim, Lukoil doubles its wellhead netback margin compared to the simple export of Urals, which translates into a substantial direct financial assistance to the Russian government and to Lukoil, while at the same time the government is claiming to support EU’s policies, instruments, and financial framework for dealing with the war in Ukraine.