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Power, Oil, and Intrigue: The High-Stakes Battle for LUKoil’s Bulgarian Empire

The fight for control over LUKoil’s assets in Bulgaria has turned into a geopolitical knife fight — one that now sits at the crossroads of Moscow, Baku, Washington, and Sofia.

After Bulgaria condemned Russia’s invasion of Ukraine, the Kremlin-backed oil giant began seeking an exit. Its crown jewel — the Burgas refinery, one of the largest in Southeastern Europe — was quietly put up for sale at the end of 2023. Price tag: $2.5 billion.

Almost immediately, Azerbaijan’s SOCAR entered the arena. Alongside it came a who’s who of global energy players: Hungary’s MOL, Kazakhstan’s KazMunayGaz, Turkey’s Oyak Pension Fund, Vitol, and a pair of unnamed U.S. investment funds.

SOCAR’s name wasn’t accidental. The company has deep regional leverage, a strategic presence in Turkey and Southern Europe, and long-standing ties with LUKoil. When asked by Euronews whether Azerbaijan was ready to buy the Burgas plant, the country’s ambassador to Sofia, Huseyn Huseynov, didn’t mince words: “If a concrete offer comes, we’re ready.”

That confidence was backed by action. In April 2023, SOCAR opened a permanent office in Sofia, inaugurated by both President Ilham Aliyev and Bulgarian President Rumen Radev — a symbolic signal that Azerbaijan wasn’t just testing the waters, it was diving in.

SOCAR’s local subsidiary has since secured a license to trade natural gas in Bulgaria, with regulators praising the company’s efficiency, logistics, and upstream access. It’s also been quietly tightening financial links with LUKoil itself — refinancing loans through Russian banks and facilitating flows of up to 200,000 barrels per day of Russian crude to its STAR refinery in Turkey.

For a while, the SOCAR–Cengiz Holding consortium was considered the clear favorite. Negotiations, insiders say, had reached the final stretch. Then — suddenly — the deal hit turbulence.

In September, Bulgarian media claimed talks were “suspended,” citing “cooling relations” between Moscow and Baku. But the story doesn’t quite add up. LUKoil still has major investments in Azerbaijan; punishing SOCAR would risk those ties. The more likely explanation? Political interference — and plenty of it.

Last week, the Bulgarian National Assembly approved a set of last-minute amendments to the Investment Law, requiring that any sale of “strategic assets” like LUKoil’s undergo double scrutiny — first by the State Agency for National Security (SANS), then by the Council of Ministers.

Officially, it’s about protecting “national interests.” Unofficially, it’s about control.

According to sources in Sofia, the amendments were pushed through by Prime Minister Boyko Borisov and Delyan Peevski, co-chair of the Movement for Rights and Freedoms — two of Bulgaria’s most powerful political figures. Critics say the new process is tailor-made to delay the deal and create room for political bargaining over who gets a piece of the energy pie.

Even more explosive are reports from The Wall Street Journal, alleging that Borisov recently met Donald Trump Jr., floating a proposal to replace Russian ownership with American investors — in exchange for lifting sanctions on former finance minister Vladislav Goranov under the Magnitsky Act.

If true, that meeting could explain why the once-straightforward sale has turned into a diplomatic quagmire.

Meanwhile, LUKoil, bleeding money in Bulgaria — roughly 10 billion rubles in losses — is desperate to cut its ties and leave. But between Washington’s shadow diplomacy, Sofia’s domestic infighting, and Baku’s strategic ambitions, its exit is becoming a full-blown geopolitical drama.

The SOCAR–Cengiz consortium still has a real chance to clinch the deal. But the outcome will now depend not just on price or performance — but on who wins the political chess match unfolding behind closed doors in Sofia and beyond.