Bulgaria is making plans to reduce its reliance on Russian oil and completely eliminate it by next fall, Bloomberg reported on Thursday, citing officials. Despite being exempt from the EU-wide ban on crude purchases from Russia, Bulgaria wants to lessen its dependence on Russian oil for its Neftohim refinery, which is owned by Lukoil. As part of the EU’s Ukraine-related sanctions on Moscow, Bulgaria was granted permission to continue buying seaborne Russian oil for its refinery until the end of 2024. However, lawmakers in Sofia recently approved a motion to cut the use of Russian oil at Neftohim to 80% by the end of this year and completely stop using it by October next year.
Bulgarian Finance Minister Assen Vassilev explained that the main challenge of transitioning away from Russian oil lies in logistics. In order to switch to non-Black Sea oil, the storage capacity at the refinery will need to be significantly increased, potentially doubled, to allow the refinery to operate for 20 to 30 days without a tanker delivery.
While the decision to reduce reliance on Russian oil may seem like a step towards diversification, analysts warn that it could pose problems for the refinery. The Neftohim refinery primarily processes Russian Urals grade oil, and finding suitable alternatives quickly will be crucial. The refinery is responsible for supplying most of Bulgaria’s diesel and gasoline, so any interruptions to its operation could impact the local fuel market.
Prior to the approval of the motion, Lukoil Neftochim Burgas, the operator of the refinery, expressed concerns about the potential impact on the plant’s operational stability. In a statement earlier this month, they emphasized that the suggested timeframe for transitioning to an alternative raw material source is unrealistic and could lead to disruptions in the refinery’s operation, which would ultimately negatively affect all fuel consumers.
The Neftohim refinery is located in the city of Burgas on Bulgaria’s Black Sea coast. According to Lukoil’s website, it is the largest oil refinery on the Balkan Peninsula and has been owned by the company since 1999. Recent data on tanker shipments reveals that Russian oil exports to Bulgaria have steadily increased in recent weeks, with an average of 180,000 barrels per day being delivered, triple the levels recorded earlier this year.
Reducing reliance on Russian oil is a significant step for Bulgaria, as it aims to diversify its energy sources and enhance its energy security. However, the challenges of finding suitable alternatives and ensuring the uninterrupted operation of the Neftohim refinery highlight the complexities involved in such a transition. The successful implementation of Bulgaria’s plans will be closely watched both domestically and internationally, as it sets an example for other countries seeking to reduce their dependence on Russian oil.
For more stories on economy and finance, visit RT’s business section.
Source link
