Lukoil's Bulgaria refinery resumes operations

3rd August 2011, Comments 0 comments

Bulgaria's Lukoil Neftochim refinery has resumed operations, the company said Wednesday, after it almost halted production over a licencing row.

"All installations have resumed operations and are gradually returning to their normal technological regime," the plant's press officer Svetla Kraleva told AFP.

Kraleva could not specify when the refinery, located in the eastern city of Burgas, would be back to its full capacity of 142,000 barrels per day.

The refinery, the only one in Bulgaria and owned by Russia's giant Lukoil, had been working at minimal levels and was preparing to halt production after the customs agency stripped it last week of two key licences necessary for its operations.

The move was prompted by the refinery's failure to install additional meters and other equipment to link its production and storage facilities to the Bulgarian revenue agency and allow for better monitoring of the amounts of crude and fuel entering and exiting the refinery.

Sofia's administrative court however ruled on Monday that Neftochim could temporarily resume working until the court decided on the lawfulness of the licence withdrawal.

The case will be examined starting on August 31.

The customs agency, which had sealed Neftochim's two tax warehouses, effectively blocking the refinery's work, said it had appealed the court's decision to postpone the halt in production.

But customs chief Vanyo Tanov, who initially threatened to keep fighting for the refinery's closure, agreed to let Neftochim continue operations.

The refinery is Bulgaria's sole supplier of jet fuel, prompting the government over the weekend to tap state reserves to prevent a massive grounding of planes at major airports in Sofia and the Black Sea cities of Varna and Burgas.

Alternative supplies, including fuel imports, also helped avert a shortage.

Lukoil's local trading arm, Lukoil Bulgaria, 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.

Meanwhile, the anti-monopoly commission announced Wednesday a probe into Lukoil Bulgaria for suspected abuse of a dominant market position, citing similar movements in fuel wholesale prices that might be the result of cartel agreements.

Economy and Energy Minister Traicho Traikov also called for a second probe into the dominant position in the jet fuel market of both the refinery and its jet fuel trader Lukoil Aviation Bulgaria.

© 2011 AFP

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