Romania reportedly avoids taking over management of Lukoil refinery

The Romanian authorities will prepare framework legislation aimed at smoothing the sale of Lukoil’s assets, including Petrotel refinery, according to Digi24, citing sources familiar with the negotiations. Initially, minister of energy Bogdan Ivan said Romania must take control of Lukoil’s refinery and not seek an extension of the November 21 deadline for the cessation of its activity under the US sanctions regime.

Meanwhile, the US extended the deadline by three weeks until December 13.

The main reason for the change in Romania’s strategy is the lack of an immediate EUR 200 million cash flow necessary for the rapid operationalisation of the refinery in the event of a temporary nationalisation.

The government intends to adopt a regulatory act by November 21, allowing the refinery to be put up for sale, under state supervision, so that the transaction can be completed as quickly as possible, according to Digi24.

Under a second stage, the government will prepare a second regulatory act for the network of approximately 300 filling stations that are also to be put up for sale. Digi24 sources said that this act would be adopted by December 13 to clarify the sale and transfer procedure.

On November 11, minister of energy Bogdan Ivan suggested Romania would temporarily take over Lukoil’s assets under the model adopted by Bulgaria and Germany.

Romania must take control of Lukoil’s refinery Petrotel 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, minister Ivan argued.

The United States has imposed sanctions on Rosneft, Lukoil, and dozens of their subsidiaries due to “Russia’s lack of serious commitment to a peace process that would end the war in Ukraine.” 

The US Treasury’s decision to put Lukoil on the sanctioned entities list has triggered the need for a rapid sale of all of the company’s international assets. The imposed deadline (“wind-down”) obliges the group to end its international operations by the end of November.

iulian@romania-insider.com

(Photo source: Petrotel.lukoil.com)