Bulgaria Pulls Out Of Controversial Oil Pipeline Project

By Svetla Dimitrova

The Russian government is expected to discuss Bulgaria’s proposal for the termination of the Burgas-Alexandroupolis oil pipeline agreement at a meeting early next year, Moscow-based news agency RIA Novosti reported on Monday (December 19th).

It also quoted Russian Deputy Energy Minister Anatoly Yanovsky as saying that the parties to the deal, including Greece, could go either way on Sofia’s request.

The Bulgarian government said on December 7th that it wanted the trilateral agreement signed in Athens on March 15th, 2007 to be terminated by mutual consent. If the other participants do not agree to this, it would pull out of the project in twelve months.

The cabinet’s decision was based on the fact that Sofia no longer views the pipeline as financially and economically viable, Finance Minister Simeon Djankov told reporters, adding that Bulgaria would not face any sanctions.

“According to the analysis of the oil pipeline project, it cannot be implemented under the terms of the 2007 agreement,” the minister explained.

Under the deal, the 279km overland pipeline, which was first conceived back in 1993, would transport Russian crude oil from Bulgaria’s Black Sea port city of Burgas to the Greek town of Alexandroupolis on the Aegean Sea. It would have an initial annual capacity of 35 million tonnes, which could later be expanded to 50 million tonnes.

Following years of negotiations, the parties eventually agreed that Russian firms would hold 51% of the shares of the project company, TransBalkan Pipeline, leaving Bulgaria and Greece with 24.5% each.

Bulgaria officially notified its partners of its decision last week. Disappointed by Sofia’s move, Greek Environment, Energy and Climate Change Minister George Papakonstantinou said that Athens was ready to renegotiate the terms of the contract.

“We are very sorry for the concrete current stance of the Bulgarian government and we would like to see the existing problems resolved,” the minister said in an interview with online news portal Greek Reporter. “We are ready to reopen talks with the two other contributing parties so that we can find an opportunity to implement the project in some other format.”

Bulgaria’s ruling centre-right party GERB has been warning about the country’s possible withdrawal from the project ever since it came to power in July 2009.

Aside from the financial and economic considerations, it previously cited environmental concerns as one of the key motives for any move in that direction.

The plan to build a pipeline, part of which would run through protected areas under the EU’s Natura 2000 network, has been criticised by environmental organisations. The population of Burgas and the other affected areas in the region, where many make a living from tourism, are staunchly opposed to the project.

In a referendum held in the port city in February 2008, 97% of the participants voted against the pipeline. The vote failed however due to low turnout.

A survey conducted by Sofia-based Alpha Research polling agency shortly after the government announced its decision to quit the project showed that 86% of the residents of Burgas supported the move.

Burgas Mayor Dimitar Nikolov said he “rejoiced with all of the city’s residents who had shown openly and firmly their opposition to the construction of the pipeline”.

Welcoming the government’s decision, he also noted that life had been tense for the people of Burgas in the past few years due to the uncertainty and the potential risks the project posed.

Although she now works and lives in Sofia, Gergana Doynova said the decision was “good news” for her hometown, Burgas, as it removed a new potential threat to both the environment in the region, as well as Black Sea tourism.

“Many people along the entire sea coast depend on tourism for a living. Can you imagine what would happen in the event of an accident?” Doynova told SETimes. “An oil spill would not only have a devastating impact on the Black Sea flora and fauna, but it would surely kill tourism in Burgas and the region and doom it to years of economic decline at best.”

Tsviatko Topalov, the owner of a three-story family hotel in the town of Chernomorets, 25km to the south of Burgas, said there was no room for any installations in the Black Sea.

“I am very happy the government had the guts to quit [the project],” he told SETimes. “Look at the all the economic and financial problems we have today. Bulgaria doesn’t need an environmental catastrophe on top of all that. It would ruin us … The Black Sea should be kept clean.”