EditBulgaria moves to enable state takeover of Lukoil assets with fresh budget amendments
Coalition MPs push to expand state guarantees as government faces scrutiny over its handling of the Russian company’s subsidiaries
Bulgaria’s governing coalition is preparing another legislative change that would open the door to the nationalisation of Lukoil’s assets in the country, deepening an already controversial process unfolding under intense U.S. and UK sanctions oversight.
Between the first and second readings of the 2026 state budget, MPs from the four ruling parties filed a proposal to increase the ceiling of state guarantees next year by €2 billion – from €3.8 billion to €5.8 billion. The authors provided no reasoning, but another amendment they filed makes the motive clear: the additional guarantees would enable the state owned Bulgarian Development Bank (BDB) to secure financing for the acquisition of assets or shares in Lukoil’s Bulgarian subsidiaries.
The move builds on earlier legislative changes which granted the state-appointed special commercial manager in Lukoil’s four Bulgarian companies – National Revenue Agency chief Rumen Spetsov, the powers to conduct disposal transactions without administrative or judicial review. The new budget proposal now ensures the state has the financial means to act on these powers.
If approved, the guarantees available to the BDB in case it takes loans from other financial institutions would reach €3.728 billion, up from the €1.728 billion endorsed at first reading and initially intended for the national housing renovation programme and a municipal investment plan. The expanded mandate would allow the bank, “if necessary”, to take part in a potential acquisition deal for the assets of the sanctioned Russian oil group.
Although state guarantees are not counted as public debt, they represent contingent liabilities that must be honoured if the loan recipient cannot repay. Earlier this year, the government injected 4 billion leva (€2.05 billion) into the capital of the BDB – funds borrowed on international markets and repayable by taxpayers. Finance Minister Temenuzhka Petkova has insisted that the money will support priority sectors such as water infrastructure, defence, energy efficiency and industrial zones.
Opposition parties warn of severe risks
Ivaylo Mirchev, co-leader of the opposition Democratic Bulgaria, told public radio that the €2 billion increase, combined with existing funds at the BDB, gives the ruling parties “around 7 billion leva (3.58 billion euro) to buy the refinery”.
“We have warned many times that the danger is that those currently governing the country – GERB and DPS-New Beginning of Delyan Peevski, sanctioned by the U.S. and Great Britain – will try to buy Lukoil,” he said. “This makes no economic sense and is an extremely foolish idea. The only thing it can bring is more corruption.”
Mirchev stressed that the opposition will resist the initiative but admitted that “Peevski has a majority of 135 MPs (out of 240) and they have no problem voting whatever they want”.
The domestic political dispute unfolds as Bulgaria prepares to seek a second U.S. derogation for Lukoil’s subsidiaries in April. Prime Minister Rosen Zhelyazkov said last week that Washington expects continued proof that Sofia can ensure the sanctioned entity’s activities remain compliant over the next six-month cycle.
The U.S. Treasury’s OFAC recently issued a six-month general licence allowing transactions with several Lukoil entities in Bulgaria, while the UK granted a parallel special licence valid until February. Both authorisations come with strict limitations and exclude dealings with other Lukoil subsidiaries unless expressly permitted.
Against this backdrop, the government appointed Rumen Spetsov as special commercial manager of the four Bulgarian Lukoil companies. Economy Minister Petar Dilov defended the choice, citing Spetsov’s “professionalism” and “trust among international partners”. Yet his appointment has triggered cross-party criticism due to past controversies and questions over whether he meets the legal requirement for five years’ experience in activities linked to oil and petroleum products.
Bulgaria’s Lukoil takeover: vast powers for one man spark political firestorm
The government further escalated tensions by rushing through amendments providing the special manager with sweeping disposal powers, shielded from administrative or judicial oversight. President Rumen Radev vetoed the law, but parliament swiftly overrode him.
Human rights lawyer Mihail Ekimdzhiev assumes that the accelerated process suggests an intention “to seize Lukoil, appropriate its assets, and then make all Bulgarians pay when the Russian company wins arbitration cases”. He warned that the legislation violates the Constitution, the European Convention on Human Rights and several other international legal instruments, voicing concerns that sanctioned political figure Delyan Peevski could ultimately gain control over Lukoil’s Bulgarian assets.
Caption: Members of the governing majority in the plenary hall of the Bulgarian parliament in Sofia, 25 November 2025/VELKO ANGELOV, Dnevnik.bg
Updated: November 26, 2025 - 06:45
