Romania to take control of Lukoil’s assets

Romania wants to take control of Lukoil’s operations to prevent an imminent freeze from the sanctions imposed by the United States. Bulgaria is already putting the Russian company’s refinery, the largest in the Balkans, under a trusteeship. Serbia announced that similar measures have been proposed to exempt Gazprom-owned NIS and its refinery, the only one in the country, from the sanctions.

Minister of Energy of Romania Bogdan Ivan seems to have endorsed neighboring Bulgaria’s approach to the issue of US sanctions against Lukoil. He said the government has to take control of the Russian company’s operations, Profit.ro reported.

The minister didn’t clarify whether it would be a temporary trusteeship. But President Nicușor Dan, who took the helm half a year ago, said there is an option for Romania to assume control for a limited period.

“We protect Romania’s energy security and firmly enforce international sanctions targeting Lukoil. My colleagues in the Ministry of Energy continue to work, together with all relevant authorities, on creating legislation that will ensure, on the one hand, full compliance with the sanctions regime established by the United States, and on the other hand, the continuity of Petrotel Ploiești’s refining activities, as well as the placement of petroleum products, without jeopardizing the supply of the national fuel market,” Ivan stated.

Minister Ivan turns more hawkish regarding sanctions against Russia

The minister claimed he would not request an extension of the November 21 deadline from the US. “Moreover, I will support the replication and uniform application of the sanctions initiated by the US throughout the European Union,” he stressed.

It marks a shift from the stance that the ministry expressed late last month, saying that the EU needs to adopt a position before Romania decides to move. Notably, Ivan held talks on November 8 in Washington with senior US officials, the article notes.

Ivan held talks on November 8 in Washington with senior US officials

“Romania must take control of the company to guarantee the full implementation of international measures, to protect the jobs of the 5,000 employees and to ensure the stability and security of the national energy system,” Ivan said.

However, the Petrotel Lukoil refinery had 542 employees on average in 2023 and another 203 worked at the company’s gas stations. Altogether, its six firms have a total payroll of under nine hundred, the article notes.

Germany placed Rosneft under state administration in 2022.

Bulgaria, Serbia struggling to keep Russian-owned refineries in operation

Nationalization could backfire because of property rights, though imposing state management is also a complicated matter. Romania earlier signaled that nationalization would be the last option.

Bulgaria has urgently adopted a law facilitating a takeover of Lukoil’s refinery in Burgas, the largest in the region. The state administrator would be authorized to sell it. It is unclear whether the measure could postpone or prevent the sanctions.

President Rumen Radev refused to sign the law and returned it to the National Assembly. It would “undermine the legal order” through “indirect nationalization” and expose public finances to a high risk, he warned.

Oil refiner and service stations operator NIS in Serbia is already under US sanctions. Russian state-owned Gazprom holds a majority stake in the company through two subsidiaries.

Serbian Minister of Mining and Energy Dubravka Đedović Handanović said yesterday that the “Russian owners” sent a request to the US Office of Foreign Assets Control (OFAC) to renew the company’s license due to “negotiations with a third party.”

The government in Belgrade has supported the request, she added. The Russian side is prepared to cede control and influence over NIS to a third party, Đedović Handanović revealed.

According to media speculations, one of the candidates is Hungary-based MOL, given that the country managed to obtain a one-year exemption from the US for Russian oil and gas.

Lukoil is operating in Serbia as well, where it has a chain of fuel stations.