Lukoil's Bulgaria refinery can resume pro tem: court

1st August 2011, Comments 0 comments

Lukoil's Bulgaria refinery licensing saga entered court on Monday, when Sofia's administrative tribunal ruled the plant can temporarily resume work until its case is examined on merit on August 31.

The Lukoil Neftochim refinery in the eastern city of Burgas has been working at minimal levels and preparing to halt production after the customs agency stripped it last week of two key licences necessary for its operations.

But the Sofia administrative court ruled on Monday in favour of postponing the execution of the customs agency orders and cleared the refinery to resume production until it reviews the licensing saga.

The court based its ruling on the presumption that the shutdown can "inflict sizeable or hardly reparable damages" to the refinery.

It also took into account Lukoil Bulgaria's claims that "there do not exist any alternative sources for the supply of jet fuel."

Customs agency chief Vanyo Tanov however told national radio he would appeal the ruling within the seven-day deadline, effectively stopping it from entering into force and sending the case to the Supreme Administrative Court.

The customs withdrew Neftochim's licences last Tuesday over the refinery's failure to install additional meters and other equipment to link its production and storage facilities to the Bulgarian revenue agency, so the amounts of crude and fuel entering and exiting the refinery can be monitored.

With a capacity of 142,000 barrels per day, Neftochim is Bulgaria's sole supplier of jet fuel and the halt in supplies prompted Bulgaria's government to tap state reserves to prevent a massive grounding of planes at major airports in the capital and the Black Sea cities of Varna and Burgas.

The refinery also has a 70-percent share in the country's wholesale fuel market and a 25-percent share in the retail market through its chain of 200 petrol stations.

Alternative fuel supplies have however managed to prevent a shortage so far.

© 2011 AFP

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