SOCAR and Turkey's Cengiz Holding Bid for Lukoil's Bulgarian Refinery

Azerbaijan's state oil company, SOCAR, is forming a consortium with Turkey's Cengiz Holding to negotiate the purchase of the "Lukoil" company's oil refinery in Burgas, Bulgaria.

The chances of success for this alliance, which has powerful lobbying resources in Bulgaria and Turkey, are quite high. However, the final decision remains with the management of the "Lukoil" company, which has been under political pressure in Bulgaria since 2022 against the backdrop of the Russian-Ukrainian war.

Let's consider that other major players are also interested in the Burgas oil refinery, in particular, Kazakhstan's national oil company, "KazMunayGas," which is ready to invest about one billion dollars, the international oil trader Vitol, the Turkish pension fund Oyak, the Hungarian MOL.

Nevertheless, in Sofia, it is the alliance of SOCAR and Cengiz that is considered the favorite in the negotiations. As is known, SOCAR has been among the contenders for more than a year and a half, and its partnership with Cengiz, one of Turkey's leading construction and energy holdings, has significantly strengthened the position of the Azerbaijani state company.

The developments have accelerated due to the risks of possible new sanctions from the US, which could be applied not only to the leaders of "Lukoil" but also to the company itself. Until now, the company had been delaying the sale of its asset in Burgas, considering that the conflict between Russia and Ukraine could be resolved in 2025. However, the threat of American restrictions has forced the Russian company to speed up the deal.

This plant is "Lukoil's" largest oil refining asset in Bulgaria. It is also a leader in the country in terms of wholesale and retail fuel trade volumes, so its acquisition is of a strategic nature.

For SOCAR and Cengiz, success in Burgas will mean the strengthening of Azerbaijan's and Turkey's energy presence in Europe. At the moment, not the least of the circumstances hindering this is the tension that has arisen and not yet passed in Russian-Azerbaijani relations.