The Burgas refinery is designed to process Urals crude. It can use other inputs, too, but under certain conditions because it has to select from the numerous grades of oil, Lukoil Neftochim Burgas Supervisory Board Deputy Chair Alexander Velichkov said at a roundtable here on Thursday.
The refinery has exprimented with 16 types of crude, but Urals has always been the backbone. A switch will also require building a reservoir park to ensure continuity of the process, Velichkov said.
The Lukoil executive said that the planned transition to the use of non-Russian oil will inevitably trigger a "short-term shock of deliveries". He said that his company had "conscientiously" familiarized the ministers of energy, finance and economy with their observations.
"The problem with replacing Russian oil is whether you can get secure deliveries and at what price," Velichkov pointed out. "At this point, deliveries across the Black Sea take 36 hours. Deliveries from outside the Black Sea take up to 600 hours, and a tanker above 80,000 tonnes cannot dock in the Bay of Burgas, whereas tankers above 140,000 tonnes cannot pass through the Bosporus," he explained.
The Burgas refinery invested USD 3.4 billion between 2000 and 2022, its Supervisory Board member said.
Currently, investments focus on the next stage of the refinery's decarbonization involving green hydrogen and polymer development.
"The profit margin in oil processing is shrinking with the advance of the Green Deal. In other parts of the world, like Austria, the government is subsidizing the sector so as to enable it to survive," Velichkov pointed out further.
"In Bulgaria, actions are taken targeting the ruining of the refinery," the Lukoil Neftochim Burgas executive concluded, describing the decisions on the revocation of the derogation as "frivolous".
In 2022, the European Commission granted Bulgaria a derogation from the EU embargo on oil imports from Russia due to the country's specific geographic exposure. Under recent legislative amendments, effective October 13, 2023, the derogration is to be conclusively revoked on October 1, 2024 (three months ahead of the December 31, 2024 deadline), and during that period Lukoil Neftochim is obliged to phase out oil originating in Russia from not more than 80% until December 31, 2023 to not more than 25% until September 30, 2024.
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