Exploiting gaps in the framework around Russia oil sanctions, which allow Bulgaria to buy crude oil from Russia until the end of 2024 through a ‘special derogation’, Bulgaria helped Russia make around 1 billion euros by allowing millions of barrels of Russian oil to reach the Lukoil oil refinery and then export the oil abroad, including to EU countries, according to a report at POLITICO.

The investigation by POLITICO corroborates information from their own independent reporting, by the NGO Global Witness, and the think-tanks Center for the Study of Democracy (CSD) and Centre for Research on Energy and Clean Air (CREA).

Between March and July, the Lukoil refinery exported around 3 million barrels of fuel, which was most likely of Russian origin. While the action doesn’t legally breach sanctions, it defies the purpose of the derogation, which was to protect the country’s security of supply for the benefit of Bulgarian citizens.

Three EU diplomats told POLITICO that the loopholes must be closed and the Commission needs a full review of Bulgaria’s derogation before it issues the next package of sanctions in the next few days.

In a separate but related report on the matter in October, Reuters noted that in 2023 Bulgaria relied almost solely on oil supplied by Russia, with Russian crude accounting for 92pct of the country’s imports from January – September. This was actually an increase from 2021 where Russian oil imports accounted for less than 70pct.

Lukoil also made an appearance in Greek press last week when OT.gr reported that CEO of Helleniq Energy Andreas Shiamishis was queried by market analysts about its interest in the Lukoil refinery in Burgas, Bulgaria on the Black Sea. He was tight-lipped about the prospects and merely noted that the group is following developments and highlighted that the unit in Bulgaria is no longer run by Lukoil since the invasion of Ukraine, but rather by the Bulgarian state.

Helleniq Energy, formerly Hellenic Petroleum, was founded in 1998 and is one of the largest energy companies in southeastern Europe and is listed on the Athens Stock Exchange as ELPE. Its key shareholders are Paneuropean Oil and Industrial Holdings SA (47.1 pct) and the Hellenic Republic Asset Development Fund (35.5 pct) with the remaining held by institutional and private investors.