Bulgargaz no longer has money to pay Botas

Bulgargaz no longer has the means to pay Botas and has officially sent a proposal to renegotiate the terms of the contract. This happened on July 4, and this month the Bulgarian gas supplier has not paid the Turkish company, announced the Bulgarian Acting Minister of Energy Vladimir Malinov during a hearing in the National Assembly (the country’s parliament).

The amendment proposal is in line with the current market levels of the services provided by Botas in the region, with the aim being to preserve the financial stability of the state-owned company, but also the advantages of the agreement - ensuring the security and diversification of gas supplies.

Bulgargaz has foreseen the optimization of the reserved capacity, the reduction of prices for the service, the structuring of the pricing of permanent and variable payment components, the possibility of unilateral termination of the agreement by the Bulgarian company, as well as the transfer of rights to third parties in full volume.

Minister Malinov hopes that the negotiations will be completed by the end of July.

When asked by the Bulgarian Socialist Party how far the European Commission's investigation into this contract has reached, the minister clarified that an ongoing study is being conducted. This involves the collection of information from the companies which are collaborating.

No specific rule violation case has been identified," said the minister.

The contract agreement has a term of 13 years and enables Bulgaria to use Botas terminals for the supply of up to 1.5 billion cubic meters of gas.

Oil and gas near Varna

The Austrian company OMV Offshore Bulgaria GmbH already has a short list of potential partners willing to join the concession for the search and exploration of oil and natural gas in the "Block 1-21 Khan Asparuh" field in the Black Sea. This information was also provided by Vladimir Malinov during the hearing.

They have a short list of preferred partners approved by the governing bodies and negotiations will be held with each of the companies,” he said.

After Total withdrew from the project officially a month ago, OMV remains the sole holder of the permit. Now the latter wants to share the financial and technical risk for the realization of the project, for which it received two more years of exploration permit. That there was a search for a new partner became clear in the spring, when OMV Petrom allowed the possibility for it to be a Bulgarian company, but so far none such have expressed an intent to participate.

From the energy minister's words, it followed that the Bulgarian Energy Holding (BEH) has not let up on the idea of acquiring a 20% stake in the project – a goal that was put on the agenda as early as the summer of 2023. A special working group carried out legal, technical, tax, financial and economic analysis. After OMV chooses the new partner, BEH will also analyze it before starting to negotiate legal and economic parameters for its 20% participation in sea drilling.

Block 1-21 Khan Asparuh field is located in the exclusive economic zone of Bulgaria in the deep Black Sea. The contract for the exploration of this area has been in force since September 2012 and has already been extended several times.

Translated by Tzvetozar Vincent Iolov