EditLukoil threatens Bulgaria with international arbitration over the state control of its assets
Lukoil’s Swiss subsidiary bases its claims on the bilateral agreement between Switzerland and Bulgaria on the promotion and mutual protection of investments
Litasco, the Swiss-registered trading and investment arm of Russia’s Lukoil, has warned it may take Bulgaria to international arbitration unless a negotiated settlement is reached over Sofia’s decision to appoint a state-mandated administrator to oversee the group’s key assets in the Black Sea country.
“The imposition of external management, subsequent actions undertaken by such management, as well as other actions of the Republic of Bulgaria that preceded or postdated the imposition of external management (including termination of the concession with respect to the Rosenets Port terminal), have materially affected LITASCO SA’s investments in its Bulgarian subsidiaries and have resulted in significant losses to the Group,” said Swiss-based Litasco, the entity through which Lukoil manages its Bulgarian operations.
Lukoil’s Swiss subsidiary bases its claims on the bilateral agreement between Switzerland and Bulgaria on the promotion and mutual protection of investments, as well as on the Energy Charter Treaty.
According to Litasco, the Bulgarian parliament’s decision to appoint a special administrator to Lukoil-controlled companies in the country breaches both international agreements.
“Specifically, those measures amount to unlawful expropriation of LITASCO SA’s investments without compensation. In the absence of an amicable resolution, LITASCO SA intends to pursue all available legal remedies, including initiation of arbitration proceedings in the International Centre for Settlement of Investment Disputes. LITASCO SA and other entities of the LUKOIL Group reserve all rights and remedies,” the company added.
Legislative amendments expanding the powers of the special administrator were adopted in early November, and on 14 November the then head of the national revenue agency, Rumen Spetsov, was appointed to the position.
Bulgaria’s Lukoil takeover: vast powers for one man spark political firestorm
Spetsov immediately removed all Lukoil representatives from the management of the company’s Bulgarian operations. Last week he told parliament that since Litasco, the owner, was removed from operational control of the Burgas refinery, the company had saved $8m.
Two months ago, Bulgaria’s energy ministry told EUalive that the state does not pay the salary of the administrator overseeing Lukoil’s Bulgarian assets — meaning the Russian company itself pays Spetsov to manage its operations in the country. His remuneration has not been disclosed.
In Bulgaria, Lukoil owns the largest oil refinery in the Balkans, as well as a network of 217 petrol stations. Lukoil Bulgaria is also the region’s biggest producer of aviation fuel.
The group’s annual turnover in Bulgaria exceeds €8bn — a substantial share of the national economy, whose GDP is roughly €110bn.
The decision to appoint a state (special) administrator to the company’s assets was taken in November, when the United States imposed sanctions affecting Lukoil’s business. Shortly afterwards, Washington granted a six-month waiver for the company’s Bulgarian operations.
Following the parliamentary decision, Lukoil said it expected the administrator not to interfere with its business activities or with the anticipated sale of its assets.
The company’s Moscow headquarters has repeatedly described its Bulgarian group as “the largest investor and fuel supplier in the country, a major employer and taxpayer, maintaining constructive dialogue with the local community and high industrial and environmental safety standards”. Lukoil says its total investments in Bulgaria over the past 25 years exceed $4.5bn.
Caption: A person walks near a truck at a gas station of Russian multinational energy corporation Lukoil in Moscow, Russia, 27 October 2025. EPA/MAXIM SHIPENKOV
Updated: February 26, 2026 - 06:37
