Bulgargaz Loses 27% Market Share Due to Contract with 'Botas

Business » ENERGY | April 11, 2024, Thursday // 11:26
Bulgaria: Bulgargaz Loses 27% Market Share Due to Contract with 'Botas

Bulgaria's state-owned energy company, "Bulgargaz," has suffered a significant setback, losing 27% of its market share as a result of a contract with the Turkish company "Botas." The contract, negotiated by the caretaker government, has raised concerns about its financial implications and the utilization of resources.

Radoslav Ribarski, a Member of Parliament from the "We Continue the Change - Democratic Bulgaria" party, revealed details of the contract's impact during a briefing following the conclusion of the temporary commission's work. According to Ribarski, Bulgaria's energy sector, particularly Bulgargaz, faces financial strain due to obligations under the contract.

The contract, signed on January 3 last year, obliges Bulgargaz to pay substantial fees daily, totaling $500,000, for unused capacity. Despite the high costs, only a fraction of the agreed-upon capacity has been utilized. Out of a potential 14 shipments, only one and a half were used in 2023, highlighting the financial burden on Bulgargaz.

WCC-DB, through Ribarski, has called on the new Acting Minister of Energy, Vladimir Malinov, to renegotiate the terms of the contract with Botas. Malinov's role as the executive director of Bulgartransgaz positions him as a key negotiator in the process. The contract, which involves Bulgartransgaz, Bulgargaz, and Botas, necessitates urgent action to address its adverse effects on Bulgaria's energy sector.

Furthermore, concerns have been raised about the nature of the contract, which involves Bulgaria delivering natural gas to Turkish waters and repurchasing it at the border—a departure from conventional supply arrangements. The agreement's terms bind Bulgaria for 13 years, posing long-term financial risks and operational challenges for Bulgargaz.

The discrepancy between the agreed-upon and physically deliverable quantities of natural gas further complicates the situation. While Bulgaria is obligated to pay for the full capacity, it can only physically deliver a fraction of the agreed-upon volume. This disparity underscores the unfavorable terms of the contract and its detrimental impact on Bulgargaz's market position.

In response to these concerns, WCC-DB intends to present all collected documentation to the National Assembly and seek further investigation by relevant authorities. They also plan to request a hearing with Minister Malinov to clarify the circumstances surrounding the contract and address its implications for Bulgaria's energy security and financial stability.

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Tags: Bulgargaz, Botas, contract, market share

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