Crisis at Bulgargaz: Market Share Plummets, Billions to Botas

Crisis at "Bulgargaz": Billions of Leva to Turkey, Market Share Collapses

Energy Minister Zhecho Stankov leveled sharp criticism at the scandalous agreement signed with the Turkish company "Botaş", stating that it leads to the decapitalization of the state-owned supplier "Bulgargaz". In a statement to the media at the Council of Ministers, he revealed disturbing details that call into question the future of Bulgaria's energy security. The minister warned that the contract is a serious threat to the stable supply of natural gas to Bulgarian heating companies.

Financial Collapse and Loss of Market Position

According to Zhecho Stankov, over the last four years, the market share of "Bulgargaz" has shrunk by almost half, reaching only about 50 percent. This dramatic loss is also accompanied by changes in the customer base, as the company loses its most solvent consumers. The minister specifically cited "Toplofikatsiya Sofia" as an example of the challenges facing the company.

Stankov described the agreement with "Botaş" as extremely disadvantageous, which places the Bulgarian state and "Bulgargaz" in an unequal position, and therefore puts the entire Bulgarian energy sector at risk.

Billions for the Turkish Gas Network and Russian Nuclear Projects

The most alarming revelation from the minister is that the agreement turns "Bulgargaz" into the largest investor in Turkey's gas transmission network. He explained that hundreds of millions have already been paid, and additional invoices are pending because the company lacks the funds to cover them. This sum is only part of the colossal over 6 billion owed under the 13-year contract.

In a shocking statement, the minister said that these funds, owed under the contract for the use of "Botaş"'s gas transmission network capacity, along with the inflation indexation, will be used by Turkey to finance the construction and completion of nuclear power plants on Turkish territory, built by Russia. This claim shifts the focus from a purely financial crisis to potential geopolitical risks associated with Russian influence in the region.

Stankov emphasized that while in 2021 "Bulgargaz" was a financially stable company with annual profits between 20 and 60 million leva, the company is now "on its knees". He expressed his belief that for 13 years under the contract, Bulgaria has "conceded" the profit of "Bulgargaz" for 200 years in advance, which will go into the accounts of the Turkish gas operator. "This weighs extremely heavily on the Bulgarian energy sector", he added.

Failure of Negotiations and Lack of Interest from Neighbors

The minister revealed that negotiations with "Botaş" are extremely difficult, as the Turkish side insists on receiving the expected funds under the signed contract, regardless of the ongoing talks. Stankov emphasized that there is no termination clause in the contract, and deferring the due amounts in the future would impose an even greater financial burden on the state.

Regarding the use of the contract, Stankov provided specific data: from January until now, only 4 cargoes have been delivered out of the 14 planned for the year. For comparison, in previous years under caretaker governments, up to 2 deliveries were made.

In addition, "Bulgargaz"'s efforts to seek joint deliveries and tenders with gas companies from neighboring and regional countries through the Turkish gas transmission network are met with a complete lack of interest. According to the minister, so far none of the gas suppliers in the region have shown a desire to join such cooperation.

Russian Gas at Bulgaria's Doorstep?

Amidst these events, Stankov also drew attention to the entry of the Hungarian energy company "MVM" into the Bulgarian energy market. The Hungarian company has stated that it will use gas supplied from Serbia and "Serbia gas", which in practice means they will use Russian natural gas.

At the end of his statement, Zhecho Stankov called on the presidential institution to become more active in talks to renegotiate the unfavorable agreement, emphasizing the critical need for joint efforts at the state level to deal with the problem.

We recall that the agreement between "Bulgargaz" and "Botaş" was signed at a ceremony in the Granite Hall of the Council of Ministers on January 3, 2023, in the presence of the then Energy Ministers Rosen Hristov and Fatih Dönmez. It is for a term of 13 years - from January 1, 2023, to December 31, 2035. According to the official information at the time, the document was intended to provide long-term access to Turkey's liquefied gas terminals and gas transmission network for 1.3 billion cubic meters annually. The agreement provided for flexibility for deliveries, ranging from zero to 53,200 megawatt-hours per day.