site.btaBulgaria Won't Pay Lukoil for Termination of Rosenets Oil Port Concession - Minister

Bulgaria will not be paying anything to the Russian company Lukoil for the early termination of the concession contract for the Rosenets oil port, Transport Minister Georgi Gvozdeikov said in an interview for Mediapool.bg. 

The Minister is going to Rosenets on Thursday when Lukoil Neftohim Burgas will hand over the management of the terminal to the Bulgarian State authorities.

In his words, the process is going according to a schedule. 

The Bulgarian State signed the contract for the Rosenets concession with Lukoil Neftohim Burgas in 2011. It was not due to expire before 2046.

On August 11, the Council of Ministers decided to terminate the concession contract as of 15 August. Parliament seconded the decision by adopting legislative changes just before the start of its summer recess. A working group was immediately set up, including representatives of the State and the concessionaire. The state-owned company Port Infrastructure was tasked with organizing the handover and accepting the terminal within 30 days, Gvozdeikov said.

He added that the Maritime Administration Agency has already issued an order to expunge Lukoil Neftohim Burgas from the register of port operators. The certificate of operational worthiness of the port has also been withdrawn.

Now Port Infrastructure is applying for a new certificate of operational worthiness for Rosenets.

Minister Gvozdeikov said that he had a meeting with the management of Lukoil Neftohim Burgas before the government decision for the concession termination. In his words, the talks went "on a good level". The company representatives said they would comply with Parliament's decision but reasoned that the decision was unlawful and did not comply with the European regulation.

The Minister said that there is "clear evidence that Lukoil Neftohim Burgas is indirectly controlled by Russia" and there is no way they can claim compensations for the concession's termination because the European regulation clearly states that no compensation is due to the concessionaire. "The same applies to the investments it has made in the terminal so far," Gvozdeikov said.

The law that led to the termination of the Lukoil concession for the Rosenets port was challenged by Rumen Radev before the Constitutional Court and a decision is upcoming.

The Minister further told Mediapool that there is no government decision to terminate the derogation for Russian oil imports ahead of schedule. The government's Security Council has not discussed this issue and has only prepared an analysis of that possibility.

Following the takeover of Rosenets' operation by the state-owned Port Infrastructure, the deliveries to this port will be controlled with the help of the Customs Agency and Border Police, Gvozdeykov said.

From the terminal, the crude will go to the Lukoil storage facility.

"For this reason, there will be an agreement to work together with the owner, Lukoil Neftohim, because we have to prove to the Maritime Administration that the oil will be stored according to the requirements for port terminals," Gvozdeikov explained.

He would not say whether excise and tax revenues will increase once the state takes control of the oil port. 

Dvozdeikov said he is not quite happy with the performance of the  Port Infrastructure management and is looking for a solution for a change of the leadership.