Hungary’s MOL set to displace Russia in the Balkan oil race
At his end-of-year press conference, the Hungarian Prime Minister Viktor Orbán highlighted a unique economic opportunity: Russia’s Lukoil is putting up for sale one of the most important oil refineries in the Balkans, Burgas Neftochim. Hungary’s MOL is also taking part in the bidding and, as the only EU bidder, the prime minister believes it has a good chance of success. This transaction could be a significant step for Hungary, not only economically but also geopolitically.
According to Telex, Burgas Neftochim is one of the largest and most modern oil refineries in the Balkans, capable of processing seven million tonnes of oil per year. The refinery uses mainly oil from the Black Sea, transported by tanker, and plays a strategic role in the region’s energy supply. Lukoil bought the plant in 1999 and has since made a number of improvements, but the company’s position in Bulgaria has declined in recent years.
If MOL is successful in acquiring the refinery, it would not only expand its interests in Hungary, Slovakia and Croatia but could also become a key player in the Balkans’ energy supply. The move would give the Hungarian company a strategic advantage in regional markets.
International competition and political challenges
MOL’s chances are boosted by the fact that the Hungarian company is the only EU bidder for the refinery, but the international field is strong: the UK-Catar consortium Oryx Global and London-based DL Hudson were previously seen in the press as the favourites. Although Lukoil has not formally negotiated with them, Bulgarian media have reported that American and Azeri investors have also expressed interest in the deal. The race is not only economic but also political, as the success of the deal depends on the decision of the Bulgarian authorities and the reduction of Russian economic influence in the region.
Bulgaria has a long history of domestic political crises. In addition to parliamentary instability and frequent changes of government, the country’s economic and energy situation is uncertain. Currently, the most prominent political figures are the President of the Republic, Rumen Radev, and the leader of the GERB-SDS coalition, Boyko Borisov. The two politicians have different positions: while Radev is more pro-Russian, Borisov is seen as a supporter of Western integration.
This political dichotomy is also evident in the case of Burgas Neftochim. Viktor Orbán’s support suggests that Hungary sees the acquisition of the Bulgarian refinery as a serious opportunity, but the local authorities’ decision to approve the deal is not without political considerations.
Lukoil in Bulgaria and new opportunities for MOL
Russia’s Lukoil has been a dominant player in Bulgaria for decades, especially after securing long-term port concession contracts for oil transport routes in the Black Sea. In recent years, however, the Bulgarian authorities have tightened their grip on the Russian company. Lukoil has been hit with substantial tax fines, and the Bulgarian government’s actions have made it clear that it is trying to squeeze the company out of the market.
The acquisition of Burgas Neftochim could open up new supply opportunities for MOL. Owning a seaport infrastructure would be a major strategic advantage, as it would allow the Hungarian company to diversify its oil supply routes. Although transport through the Bosphorus is difficult, the refinery would be able to process a significant part of the Kazakh, Saudi or Iraqi oil coming through the Black Sea.
Some experts say that in the long term it would be worth considering the construction of a Bulgarian-Serbian-Hungarian oil pipeline, which would offer a more stable transport alternative. For MOL, such a move would not only improve security of supply, but would also allow further market expansion in the Balkans and Central Europe.
Ending Lukoil’s local dominance could also be important from a geopolitical perspective. The reduction of the Russian economic presence in Bulgaria could lead to increased stability in the region, while MOL’s involvement could strengthen EU interests. Although public opinion in Bulgaria is mixed on the perception of Hungarian political involvement, MOL’s EU background may make it more favourably received than another Russian or foreign interest.
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