Bulgaria is preparing to take control of Russian oil company Lukoil’s Burgas refinery, the country’s only oil-processing facility, to protect it from US sanctions, Bulgarian media reported.

The government is drafting legislation that would allow it to appoint a special administrator to temporarily oversee and sell the Lukoil-controlled refinery, Bulgarian outlet Mediapool reported on November 5. The measure is aimed at shielding the facility from potential disruptions after Washington imposed sanctions on Russia’s two biggest oil producers, Lukoil and Rosneft, over Moscow’s war in Ukraine.

The Burgas refinery, which processes about 240,000 barrels of crude per day, is regarded as critical infrastructure for Bulgaria’s energy security. Provisions for temporary state management of strategic assets were first introduced in 2023, laying the groundwork for the new proposal to keep the refinery operating under Bulgarian oversight if sanctions pressure intensifies.

Former prime minister and GERB party leader Boyko Borissov confirmed that the draft bill would be submitted to parliament this week. “There is a lot of logic in this, which is why today we will submit a draft law on the special governor,” Borissov was quoted as saying by public broadcaster BNT.

Under the draft law, a state-appointed special manager would have the power to sell the refinery’s assets, with Lukoil stripped of voting rights and the ability to appeal during the sale process, Mediapool reported. Industry representatives have described the plan as an effective nationalisation that could fragment assets and carry risks for Bulgaria’s market and energy system.

Lukoil, which is under US sanctions related to Russia’s invasion of Ukraine, said last week it was preparing to sell foreign assets affected by the restrictions. The company’s international branch, including its Bulgarian operations, is estimated to be worth about $20bn.

The US is yet to approve a potential sale of Lukoil’s foreign assets to energy trader Gunvor.

Bulgaria’s parliament on November 6 overrode President Rumen Radev’s veto on recent amendments to the Investment Promotion Act, re-adopting the bill with 125 votes in favour and 74 against. The revised law requires government and security agency approval for any sale of Lukoil’s Bulgarian subsidiaries, including the Burgas refinery.

Radev had vetoed the measure on November 5, arguing that it violated the constitution and unfairly targeted a single company. The law, initially passed on October 24 by the ruling GERB-UDF coalition, was expedited after the US imposed sanctions on Lukoil and Rosneft on October 22.

Bulgaria has sought to reduce its reliance on Russian energy since late 2023, when it began exploring options to divest from Lukoil’s local assets, which include the Burgas refinery, more than 200 petrol stations and businesses involved in aviation fuel and gas trading.