site.btaAny Foreign Direct Investment Likely to Affect Security in Bulgaria Could Be Stopped: PM Zhelyazkov

In 2024, amendments to the Investment Promotion Act were adopted, which regulate the conditions and procedures for screening foreign direct investment related to security or public order. Under the screening mechanism introduced, prior authorisation is required for any foreign direct investment that meets the conditions specified in the law, Prime Minister Rosen Zhelyazkov said during a hearing in Parliament on Bulgaria's readiness to ensure the protection of national interests in view of the process of changing the ownership of the Lukoil Neftohim Burgas refinery.

He stressed that subject to screening are all cases of direct foreign investments in objects and activities related to the production of energy products from oil and products of petroleum origin in an object, part of or adjacent to critical infrastructure, as is the case with Lukoil Neftohim Burgas.

The Prime Minister added that foreign direct investment is made after clearance from the Interministerial Council for the Screening of Foreign Direct Investments. It has the power to reject any foreign direct investment that is likely to affect security and takes into account its potential impact on critical infrastructure, whether physical or virtual, including those related to energy and transport, the supply of critical resources, including energy and raw materials, Rosen Zhelyazkov said.

He added that the state, which is the holder of the golden share of the company, has the right to block the adoption of certain decisions by the General Assembly.

According to unconfirmed data, the price sought by the company's management is about USD 2 billion, Rosen Zhelyazkov said.

Bulgaria regards the Lukoil Neftohim Burgas refinery as a strategic installation. The State holds a Class A (or "golden share") in the oil refinery. This blocking minority interest entitles the Bulgarian Government to convene a shareholders' general meeting on all key issues concerning the company. One member of the company's Supervisory Board is named by the Minister of Economy. This representative was replaced in mid-November, as Tsvetan Tsirkov took over from Boyko Nitsov. A sale of or change in the majority holding in the Russian-controlled company has to be cleared with the Commission on Protection of Competition and the State Agency for National Security. Under Bulgarian legislation, the State can take control of the refinery if national security is jeopardized.

This year, Hungary has imported 7.5 billion cu m of Russian gas over the TurkStream pipeline and additional quantities via Romania.

Analysts warn that Russian financing may be attracted as the bidder's (the Hungarian Oil and Gas Plc – MOL) financial capabilities are limited, www.oilprice.com said.