The end of 2025 brought Bulgaria the long-awaited public consultation on the Ordinance Determining the Concession Payment for Production of Underground Resources.
The current effective ordinance was adopted in June 1999 and last amended in 2007, but it has been clear for years that this ordinance needed to be updated.
There has been several attempts to amend the Ordinance since 2020, but was not adopted mainly due to industry objections and the significance of the proposed changes to the viability of ongoing production projects and those in the pipeline.
On 8 December 2025, another attempt at an amendment was made when the Ministry of Energy published for public consultation the draft Ordinance Determining the Concession Payment for Production of Underground Resources.
The public consultation is scheduled to close on 7 January 2026. All interested parties may send feedback on the proposed draft directly to the Ministry of Energy at the following email address: e-energy@me.government.bg.
Focusing on oil and gas, the proposed oil-and-gas concession payment cited in the ordinance is a concession percentage related to an R‑factor schedule. The schedule includes increased rates as cumulative revenues outpace cumulative costs, featuring higher rates across most bands, adjusted thresholds, and linear step‑ups within bands for each 0.01 increase in the R‑factor.
The following is a comparative table with the rate structure:
| R‑factor band | Current concession fee | Proposed concession fee |
|---|---|---|
| < 1.50 | 2.5% | 3.5% |
| 1.50–1.74/1.75 | 5.0% (1.50–1.75) | 7.0% (1.50–1.74) |
| 1.75–1.99/2.00 | 7.5%–10.0% (1.75–2.00) | 9.0%–11.49% (1.75–1.99), rising by 0.1039% per +0.01 R |
| 2.00–2.49/2.50 | 10.0%–12.5% (2.00–2.50) | 11.50%–13.99% (2.00–2.49), rising by 0.0508% per +0.01 R |
| 2.50–2.99/3.00 | 12.5%–22.5% (2.50–3.00) | 14.0%–19.99% (2.50–2.99), rising by 0.1222% per +0.01 R |
| ≥ 3.00 | 25.0%–30.0% | 20.0%–35.0%, rising by 0.2% per +0.01 R |
The Draft Ordinance standardises payment timing, reporting, and accounting. Annual concession payments are due in two semi annual instalments (by 31 July and 31 January), and concessionaires must submit half-year standardised reports to the Minister of Energy and maintain accounting compliant with the Accountancy Act.
Targeted relief will be available for deposits with unfavourable mining geological, technological, or economic characteristics or to revive production in municipalities with persistent unemployment. Relief includes up to five years of full exemption or a 50% reduction as reflected in the concession agreement.
After the public consultations are closed, the Ministry of Energy will begin coordinating the Ordinance with other affected ministries.
For more details on this Draft Ordinance, contact your CMS client partner or the CMS experts who contributed to this article: Kostadin Sirleshtov and Denitsa Dudevska
