Bulgaria buys Russian gas, circumventing sanctions: a scheme disclosed

With the oil embargo approaching, Moscow is increasing its efforts to find ways to circumvent or evade EU sanctions imposed for its war against Ukraine. Workarounds and sophisticated schemes can help the Russian Federation continue to export gas and oil to EU countries; one such scheme has been exposed in Bulgaria.

Despite the official suspension of gas supplies to Bulgaria by Russia’s Gazprom (since Sofia refused to switch to payment in Russian rubles), the Russian corporation continues to supply gas to the country. The contract between the state-owned Bulgarian oil and gas company Bulgargaz and Russia’s Gazprom expires on December 31, 2022.

Russian gas is supplied to Bulgaria via Greece under the guise of Norwegian gas

According to anonymous sources, an intermediary – the Greek energy company “Mytilineos S.A.” – is used to hide the origin of Russian gas. A sophisticated scheme has been created for this.

In particular, after the arrival of gas through the Turkish Stream pipeline to Greece, the company “Mytilineos S.A.” resells it to the Bulgarian company Bulgargaz. At the same time, the gas is officially declared as Norwegian. For this, according to sources, certificates of origin are fabricated. Bulgaria imports liquefied natural gas from Norway.

Does president Radev know about the circumvention scheme?

It is possible that the new scheme for obtaining Russian energy resources was created with the assistance of the pro-Russian president of Bulgaria, Rumen Radev, and the country’s interim government under his control, which is a supporter of maintaining relations with Moscow, despite its war against Ukraine and EU sanctions.

Radev is a major general and former commander of the Bulgarian Air Force. He was nominated for the first time in the elections by the Socialist Party, and in 2021 he was elected for a second term.

Bulgaria reached an agreement with Lukoil, despite warnings from the European Commission

Earlier, Bulgaria reached an agreement with the Russian oil company Lukoil, allowing the Russian company to bypass the EU embargo.

Bulgaria’s interim government and Lukoil Naftohim Bulgaria have agreed that it can continue to operate and export oil products to the EU until the end of 2024, provided taxes are paid in full. Euractiv reported this.

The agreement was reached despite the European Commission’s warnings that it would violate the EU sanctions regime.

In its June sanctions package, the EU banned the purchase, import, or transfer of Russian crude oil from December 5, 2022, and other petroleum products from February 5, 2023, from Russia.

However, Bulgaria was granted an exception “due to its specific geographic vulnerability” and can continue to import crude oil and oil products by sea until the end of 2024.

Agreement with Lukoil can make Bulgaria a gate for circumventing sanctions

The agreement looks beneficial for Lukoil, as it will de facto make Bulgaria a gate for partial circumvention of the European oil embargo.

The Council of the European Union recognized the circumvention of economic sanctions as a crime in the EU. Brussels included evasion of the sanctions regime in the list of crimes to prevent attempts by Russian companies to avoid EU sanctions.

Lukoil cannot export oil products from Bulgaria – European Commission

The European Commission has already said that Lukoil cannot export from Bulgaria petroleum products made from Russian oil. Still, the interim government claims that the Bulgarian media misinterpreted Brussels’ position, the Ministry of Finance said.

Meanwhile, the interim government in Sofia intends to revoke the decree of the previous government of Kirill Petkov, which bans the export of fuel produced by Russian refineries in Bulgaria after December 5.

This will allow the Russian company to continue working in Bulgaria in the current regime until the deadline of December 31, 2024, when the particular concession for Bulgaria expires.

We will see shortly whether the European Commission will be able to prevent the schemes for circumventing sanctions against Russia in Bulgaria. However, in any case, the media should closely monitor this situation in the coming months after the oil embargo takes effect.