Comment by Emilia Milcheva:
Four years after the Russian invasion of Ukraine, Bulgaria has made a sharp turn in its policy to limit Russian influence in energy. The government demanded that Russian billionaire Vagit Alekperov be removed from the new package of European sanctions and agreed with “Lukoil“ on changes in the regime of crude oil supplies to the Burgas refinery.
The new turn is a continuation of the old model, in which there was no political will to oppose the dominant position of ”Lukoil” and against the mechanism that allowed the non-payment of profit tax.
Today, the authorities are again making concessions, citing the danger that Bulgaria will be condemned in an arbitration claim for 3 billion euros. However, there is no such proceeding.
There is no arbitration (yet)
But Prime Minister Rumen Radev motivated the request to remove Alekperov from the sanctions list with exactly such a danger. “Considering that “Lukoil” has filed an arbitration claim against Bulgaria for 3 billion euros, we will not allow sanctions to be imposed on Vagit Alekperov. This means that we will shoot ourselves in the foot”, said Radev. This argument is also supported by the modernization of the Burgas refinery, highlighted by the Prime Minister and the Minister of Economy, Alexander Pulev.
While public attention was riveted by the controversy surrounding the Russian Patriarch Kirill, also proposed for removal from the sanctions list, Alekperov remained in the shadow of this scandal. There was also a lack of convincing explanation as to why Bulgaria insists that the largest individual shareholder in “Lukoil”, who owns nearly 28% of the company, be exempted from European sanctions.
Public discourse creates the impression that an arbitration case for 3 billion euros has been filed against Bulgaria. The documents show a different picture - and fuel doubts that the government can use these suggestions both as pressure and as a justification for its actions.
On February 19 this year “Litasko”, the Swiss division of “Lukoil”, sends the Bulgarian state the so-called Notice of Dispute - a notification of an investment dispute. This is not an arbitration claim. The notification is the first step by which the investor states its claims and allows the dispute to be resolved through negotiations between the parties.
If this does not happen, then a request for international arbitration may be filed. Or it may not be. At the moment, there is no publicly registered arbitration proceedings against Bulgaria before the International Center for Settlement of Investment Disputes (ICSID). There is no such case in the list of new cases for 2026.
The origin of the sum of 3 billion euros remains unclear. The Notice of Dispute itself is not public. It is not in the official announcement of “Litasko”. It is not known what this claim is based on.
The official announcement of “LITASCO” from February this year states that in the absence of an out-of-court agreement “LITASCO intends to take all available legal remedies, including initiating arbitration proceedings before ICSID”.
On June 29, Deutsche Welle sent questions to the Council of Ministers (CM) and the Ministry of Economy related to the distinction between an arbitration claim and a Notice of Dispute, about who was the body that decided Bulgaria to request the removal of Alekperov from the EU sanctions list, on what grounds and with what legal analysis. There were no answers.
On June 30, talks were held at the Council of Ministers between Rumen Radev, Pulev and Finance Minister Galab Donev with representatives of the Swiss trading company “Litasko”, part of the “Lukoil” group, and the Russian company itself. Questions from the media were not allowed afterwards.
A breakthrough, but for whom?
The meeting was presented by Pulev as “a first step towards reaching an out-of-court agreement that would protect the interests of both parties”. In his words, there is “a subsequent commitment with active dialogue to reach the complete elimination of the arbitration dispute”.
The Minister of Economy announced that from July 1 “Lukoil Neftochim Burgas” can buy oil from all traders registered in Switzerland. The restrictions on purchases imposed so far were due to a loan of 1.1 billion leva (562.4 million euros) granted by “Litasko” to the refinery.
The government presented the agreement from the meeting as a “breakthrough”. But for whom? Martin Vladimirov, director of the “ΕEnergy and Climate” program at the Center for the Study of Democracy (CSD), explained to Deutsche Welle that the loan between “Litasko” and “Lukoil Neftokhim” is part of the intra-group relations through which over the years the profit of the Burgas refinery has been transferred outside Bulgaria through transfer pricing. The Swiss company buys the crude oil and resells it to the refinery at a higher price, so that most of the profit remains with the trader, and the Bulgarian company accumulates debts.
According to Vladimirov, the announcement of this loan as early due after the US sanctions raises the question of whether it was used as a means of pressure in negotiations with the Bulgarian state. According to him, the agreed changes may restore a model in which a significant part of the profit is again exported outside Bulgaria, while at the same time questions arise about their compliance with the US sanctions regime, the implementation of which is within the powers of the US Office of Foreign Assets Control (OFAC).
In October last year, the UK and the US imposed sanctions on “Lukoil” and “Rosneft” and all their subsidiaries, with their assets frozen. Since then, preparations have been underway to sell their foreign assets, and until the transactions are completed, they are given a temporary derogation so that they do not stop working. The sales can only be carried out with the permission of OFAC, whose goal is to remove the assets from the control of the sanctioned Russian companies in order to interrupt the flow of revenue to the Russian military machine. The four companies of “Lukoil” in Bulgaria operate with such a temporary permit, which expires on October 29.
Since November 2025, they have been managed by a so-called special commercial manager appointed by the state. Rumen Radev's majority replaced Rumen Spetsov, who was appointed last fall, with his own staff.
In defense of the changes agreed with “Litasko”, the new manager Evgeni Simeonov announced that due to the previous supply restrictions, the refinery was forced to process heavier grades of crude oil, which led to damage to the installations.
After the termination of the derogation for Russian oil in 2023, the enterprise operates with non-Russian raw materials and there have been no such signals. According to experts, the Burgas refinery is one of the most modern and can process 24 types of oil, of which Kazakh oil is closest to Russian oil.
Why right now
Since there is no arbitration proceeding, the question remains why Bulgaria insists that Vagit Alekperov be exempted from European sanctions and what it is actually trying to negotiate with the Russian company.
The company itself cites as reasons for the Notice of Dispute the termination of the concession of the “Rosenets” terminal and the early termination of the derogation for the import of Russian oil. However, both decisions were made back in 2023, while the notification of an investment dispute was sent only in February 2026. In it, “Litasko“ also affects the figure of the special commercial manager, whose appointment is defined as an illegal alienation of her investment without compensation.
But the special commercial manager was also introduced into Bulgarian legislation in 2023. His powers were expanded last fall - and limited by Rumen Radev's majority. However, the chronology of events also raises another question. The Notice of Dispute, which threatens arbitration in the absence of a voluntary settlement of the dispute, was sent on February 25, 2026. At that time, the first predictions were already known that Radev, who left the presidency, would be the winner of the early elections.
As head of state, he had significant meetings with the top management of “Lukoil”, including and with Alekperov and his successor, President Vadim Vorobyov.
What does Alekperov gain
However, the benefits for Bulgaria from removing Vagit Alekperov from the sanctions list remain unproven. The benefits for him are easily traceable.
The founder of “Lukoil” left the post of president of the company in April 2022, after Britain and Australia imposed sanctions on him. In 2024 and 2025, he was the richest Russian, and in 2026 he is third in the Forbes Russia ranking with a fortune of about $ 29.5 billion.
European sanctions against Russian oligarchs are not a symbolic act
The EU sanctions mean a freeze on his assets in member states and a ban on European citizens and companies from providing him with resources. This would make it difficult not only to manage his personal wealth, but also to participate in corporate transactions, including those related to the sale of the international assets of “Lukoil“.
European sanctions against Russian oligarchs are not a symbolic act. It is no coincidence that sanctioned Russian businessmen such as Mikhail Fridman and Pyotr Aven challenged the European measures against them in court.
For four years, Bulgaria has been convincing its allies that it is freeing itself from Russian energy dependence and that this is a matter of national security. But today, the government of Rumen Radev is using the same argument to protect one of the most influential Russian businessmen and make new concessions to “Lukoil”. If this is the new state policy, the public deserves to know by whom and where this decision was made.