(Bloomberg) -- Bulgarian lawmakers on Thursday approved a motion to gradually end imports of Russian crude, bringing the country in line with other European Union members.
The move will force Lukoil PJSC’s local Neftohim refinery, the biggest in southeast Europe, to look for alternative feedstock. That’s a tall order since the plant processes mostly Russian crude, and the most obvious replacement barrels — from Kazakhstan — are already in demand in neighboring Romania.
Bulgaria and a handful of other EU countries are exempt from the bloc’s ban on Russian crude imports until the end of 2024, but Sofia is bringing that forward. Lawmakers voted to curb the use of Russian oil at Lukoil’s refinery to 80% by the end of this year, and phase it out completely by next October.
“The question of moving off Russian oil for the refinery is mainly a logistics question,” Finance Minister Assen Vassilev said in an interview late Wednesday. “In order to move to non-Black Sea oil, the actual storage capacity needs to be increased substantially — maybe doubled — so that the refinery can work 20, 30 days potentially without a tanker coming in.”
Shipments of Russian Urals crude across the Black Sea to Bulgaria have risen in recent weeks, topping 180,000 barrels a day, three times the level seen earlier this year. Alternatives include Kazakh crude sent via the Russian port of Novorossiysk, but a Kazakh-owned refinery in Romania — which halted Russian imports last year — already takes some of that supply.
Bulgaria may need to look further afield to the Middle East or North Africa to replace Russian barrels at Lukoil’s refinery, whose output accounts for most of the Balkan country’s diesel and gasoline supplies.
The lawmakers’ move adds to Bulgaria’s efforts to diversify its energy supplies after relying for years almost entirely on Russia for natural gas, oil and fuel for its Soviet-style nuclear plant. In the fallout of the Kremlin’s war in Ukraine, Bulgaria was cut off from Russian gas supplies, and was forced to seek alternatives from Azerbaijan and regional liquefied natural gas sources.
In July, the government ended Lukoil’s port lease, part of the infrastructure supporting the Neftohim refinery. It is also working to secure licensing for nuclear fuel from Westinghouse Electric Co. LLC.
--With assistance from Julian Lee.
(Updates with vote, Bulgarian energy supplies from first paragraph)
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