Bulgaria's Lukoil Refinery slashes costs by $8 million
Bulgaria's Lukoil Neftohim Burgas refinery has achieved a remarkable cost-saving feat, slashing $8 million in just two months. This achievement is attributed to the refinery's decision to discontinue its partnership with Swiss-based trading intermediary Litasco SA, as confirmed by Special Commercial Administrator Rumen Spetsov. Spetsov revealed that the primary cost-saving measure was the elimination of commission fees previously paid to the intermediary between the refinery and Lukoil's oil reserves.
The refinery's financial stability has been further bolstered through deferred payments and barter deals, resulting in a positive financial outcome for the current year. Lukoil Neftohim Burgas is the largest oil refinery in the Balkans, specializing in heavy crude oil processing, with a preference for Russian Urals. Its processing capacity stands at approximately 9.5 million tonnes of crude oil annually, equivalent to around 190,000-196,000 barrels per day.
The Swiss trading arm's demise is a consequence of U.S. and UK sanctions, leading to significant layoffs at its Geneva headquarters and the impending closure of its Swiss offices. In late 2025, the Bulgarian government assumed operational control of the refinery to safeguard national energy security and mitigate the risk of secondary sanctions. Despite the Trump administration's license allowing transactions with Lukoil's Bulgarian entities until April 29, 2026, the refinery remains on the market.
The deadline for Lukoil to divest these assets is set for February 28, 2026. Reports in January indicated that the Carlyle Group had agreed to acquire Lukoil's international assets, including the Burgas refinery, pending U.S. regulatory approval. This deal encompasses LUKOIL International GmbH, which includes refineries in Bulgaria and Romania, a stake in the West Qurna 2 oilfield in Iraq, and various other assets across Europe, the Middle East, and Africa. However, assets in Kazakhstan, including the Caspian Pipeline Consortium (CPC) and the Tengiz oilfield, are not part of the deal.
