Lukoil Neftochim Burgas has increased refinery throughput since June and recorded its strongest monthly profit in five to six years in July, marking a notable improvement from the operational and liquidity pressures seen earlier in the summer.
Processing volumes have gradually recovered following management and organisational changes introduced after special commercial administrator Evgeni Simeonov took over in early June.
Liquidity was one of the immediate concerns.
The refinery arranged crude supplies using deferred payment terms to reduce pressure on working capital, while procurement strategy shifted towards securing the cheapest crude compatible with the plant’s technical requirements.
Management has also sought improved prices for products sold into export markets.
The combination of higher processing rates and stronger commercial conditions produced the refinery’s best monthly profit in several years during July.
A technical assessment has meanwhile reduced concerns that a major maintenance programme could force the plant into a prolonged shutdown in the near term. The review found no requirement for such a shutdown before 2028.
That is important for Bulgaria because the Burgas refinery remains a central component of the country’s fuel supply and distribution system.
Management argues that elevated fuel prices currently reflect tight international availability of finished products rather than operational problems at the refinery.
Sanctions nevertheless remain the largest external risk.
The company has strengthened counterparty controls, introducing a dedicated committee to screen companies and individuals before transactions are approved.
The wider sanctions framework is more consequential. Simeonov warned that the derogation under which operations can continue remains critical. Without it, around 5,000 jobs could be exposed, more than 120 filling stations could close and disruption could spread through parts of Bulgaria’s fuel logistics chain.
The refinery is therefore showing two very different trends at the same time.
Operational performance, cash management and profitability have improved markedly since June, while the longer-term ability to maintain those gains remains dependent on regulatory and sanctions conditions outside the company’s direct control.
For the Bulgarian fuel market, rising refinery runs provide near-term supply support. But the principal structural risk has shifted from refinery performance towards whether the regulatory framework continues to permit normal crude procurement, financing and product sales.
