UK Extends General Licence Allowing Transactions with Lukoil’s Bulgarian Subsidiaries Until February 2027

The United Kingdom has extended a general licence permitting certain transactions with four Bulgarian subsidiaries of Russian oil company Lukoil, allowing authorised business activities to continue until 26 February 2027. The extension, announced by the Office of Financial Sanctions Implementation (OFSI) on 28 October 2026, provides additional time for businesses and financial institutions to maintain permitted operations despite UK sanctions affecting the wider Lukoil group.

The licence, INT/2025/7895596, had been due to expire on 29 October 2026. It covers Lukoil Bulgaria EOOD, Lukoil Neftochim Burgas AD, Lukoil Aviation Bulgaria EOOD and Lukoil Bunker Bulgaria EOOD, together with entities owned or controlled by those companies within the scope of the authorisation.

The licence permits UK persons and entities to continue specified business activities with the covered companies. These include making and receiving payments under existing or new contracts, as well as providing or receiving economic resources. UK financial institutions may also process payments authorised under the licence.

The authorisation is significant because UK sanctions ordinarily restrict dealings involving designated persons and entities, including making funds or economic resources available to them directly or indirectly. A general licence provides a defined legal basis for specified activities that would otherwise be prohibited, provided all its conditions are satisfied.

The extension does not remove Lukoil’s designated status or amount to a general exemption from sanctions. Instead, it establishes a limited framework under which dealings with the named Bulgarian businesses and qualifying subsidiaries may continue. Businesses must therefore establish that the relevant counterparty and transaction fall within the licence before relying on it.

The licence also imposes notification requirements. Entities using the authorisation must notify HM Treasury in writing within 14 days of beginning the relevant activity. Entities that were already relying on the amended licence when the new notification requirement was introduced on 12 August 2026 were required to notify the Treasury within 14 days of that date. Users must provide their contact details and report relevant changes.

Designated persons and entities, as well as entities owned or controlled by them, cannot rely on the licence where excluded by its terms. The authorisation applies only to the UK Russia sanctions regime and does not permit conduct prohibited under other UK sanctions regimes. Companies must therefore consider whether separate restrictions apply to a transaction, even where the Bulgarian counterparty is covered by the licence.

The extension follows earlier amendments to the authorisation. OFSI first issued the licence on 14 November 2025 to permit the continuation of business operations with Lukoil’s Bulgarian entities. Its scope was subsequently expanded to include Lukoil Aviation Bulgaria and Lukoil Bunker Bulgaria. In August 2026, OFSI amended the definition of covered subsidiaries, introduced a notification requirement for entities relying on the licence and extended its validity to 29 October 2026.

The UK’s measures reflect the difficulties of maintaining essential commercial operations involving foreign subsidiaries of a sanctioned parent company. Lukoil’s Bulgarian businesses include fuel retailing, refining, aviation fuel and bunkering activities. The Burgas refinery is particularly important to Bulgaria’s fuel supply, while the other businesses provide services across the domestic energy and transport sectors.

The extension provides continuity for authorised transactions but does not resolve the broader questions surrounding Lukoil’s international assets and their future ownership. The group has been examining options for selling international operations following the imposition of sanctions, and any potential restructuring or sale remains subject to the applicable regulatory requirements and authorisations.

For businesses operating in the energy supply chain, the extension demonstrates the importance of monitoring sanctions licences separately from the sanctions lists themselves. A counterparty may be designated while certain transactions remain permissible under a specific general licence. Conversely, the existence of a licence does not mean that all dealings with the counterparty are allowed.

Compliance teams should verify the current version of the licence, confirm that the relevant company is covered, assess whether the transaction falls within the permitted activities and meet any reporting obligations. They should also retain supporting records and check for restrictions under other applicable sanctions regimes. Where ownership or control is unclear, or where a transaction involves a designated party outside the scope of the authorisation, further legal assessment may be necessary.

The extension to 26 February 2027 gives UK businesses and financial institutions additional time to conduct qualifying transactions with Lukoil’s Bulgarian subsidiaries under specified conditions. It remains a limited authorisation, however, and continued compliance depends on observing its scope, exclusions and notification requirements.

By fLEXI tEAM