Main image: The Burgas refinery already receives about 40% of its supplies from KazMunayGas, and the acquisition would strengthen the Kazakh company’s position in the European market. [Artur Widak/NurPhoto via Getty Images]
Kazakhstan's state oil and gas company, KazMunayGas, has offered $1 billion to purchase Lukoil Neftochim Burgas, the only oil refinery in Bulgaria, currently owned by Russia's Lukoil.
This was reported by Euractiv.
The refinery, located in the city of Burgas, already sources around 40% of its supplies from KazMunayGas. The acquisition is expected to strengthen the position of Kazakhstan's state oil and gas company in the European market.
KazMunayGas also owns a refinery in Romania, which operates a network of gas stations in Bulgaria under the Rompetrol brand. According to the report, the purchase of Lukoil’s refinery would more than double the company’s oil refining capacity in Europe.
Euractiv, citing Bloomberg, notes that Litasco, a Swiss subsidiary of Russia’s Lukoil, has received offers from several potential buyers, including KazMunayGas.
KazMunayGas is reportedly discussing financing for the deal with Swiss company Vitol Group, the world's largest independent oil and gas trader, which has significant influence in Kazakhstan. Vitol's subsidiary also holds a license to trade electricity and gas in Bulgaria.
The sale process for Lukoil Neftochim Burgas is expected to take about a month. Under the terms of the agreement, the payment will be made to Litasco, which is not subject to Western sanctions. The company must ensure that the funds are not transferred to Russia.
Additionally, KazMunayGas is seeking support for its bid from the Bulgarian government, arguing that the Lukoil Neftochim Burgas refinery is designed to process Russian oil, which is similar in quality to Kazakh oil.