The European Prosecutor's Office entered the building of "Bulgartransgaz" days ago, after the police secured access to the premises of the state gas operator. The reason is a report of irregularities in the implementation of a project financed free of charge by the European Commission. There was also an inspection in other companies related to the expansion of the gas storage facility in Chiren.
The entry of Kyoveshi's people takes place days before the visit of the Turkish company BOTASH for negotiations with "Bulgargaz" for changing the contract for gas capacities in Turkey, which is unfavorable for the Bulgarian company.
As the main reasons for the action of the European Prosecutor's Office in "Bulgartransgaz" point to the expansion of the gas storage in "Chiren" and the deal of "Bulgargaz" with the Turkish company BOTAS.
But what goes out in “the bedroom” our country
As can be seen from the facsimile, the signal of the Bulgarian Energy and Mining Forum was submitted in our country on FEBRUARY 14, 2024 to the President Rumen Radev, the Ministry of Energy, the National Assembly, the Ministry of Finance. Today is August 15… What were the Bulgarian institutions waiting for, what were they thinking. And because the European Prosecutor's Office intervened, suddenly and out of nowhere all the institutions moved. And from February 14 until today they “slept”. Why did they “sleep”, why were they inactive, why should Europe tell us and show us the “rotten apples” in our poor country.
Fakti has the signal, which is addressed to all leading institutions in the country, in connection with the expansion of the gas storage facility in Chiren.
Here is the full text:
SIGNAL
RE: HIGH RISK FOR BULGARIA'S ENERGY SECURITY - Compromise of the "Chiren" gas station expansion project, energy security and reasonable allegations of corruption.
DEAR MR RADEV, The Bulgarian Energy and Mining Forum (BEMF) is the largest NGO working for the public benefit, which has always brought to the attention of the Government and the public signals and reasoned proposals for revising wrong policies and questionable deals in the energy sector . Members and associates of BEMF are authoritative energy experts and industry professionals who have held responsible positions in it.
The reason for this alert is our concern related to the serious dangers hanging over the "Chiren" PGH. for its technological compromise due to the unprofessional and dubious actions of the management of “Bulgartransgaz" EAD. The meaning of PGH "Chiren" hardly needs an introduction - this topic has been discussed for decades, as well as the question of its expansion and modernization. Over the past two decades, a number of successful actions have been taken in this direction, the results of which led to the creation of a conceptual model - the basis for the implementation of a comprehensive modernization and expansion project. Unfortunately, however, some fundamental problems related to and preceding the realization of such a project have not yet been resolved (mainly due to the low hermeticity of extraction-injection wells), which represents a high risk, in parallel with the unconvincing professional qualities of its contractors, chosen on the last tender for the implementation of the project. Without considering the risk of these fundamental problems, the management of "Bulgartransgaz" EAD has announced a general procurement (OP) for "Organization planning, development of an investment project, supply of the necessary materials and equipment, construction and commissioning of all stages for a site: “Expansion of the capacity of “PGH Chiren" drilling fund".
The main volume of activities is related to the drilling of 10 (ten) operational inclined-directional wells and 3 observation (vertical) wells for a period of 600 calendar days.
After an auction was held and the refusal of the winner of the auction, DZZD "Chiren Drilling 2022", town of Kozloduy, to sign the relevant contract, DZZD "Exzalo Drilling Chiren", city of Sofia, with participants "Glavbolgarstroy" was appointed as the contractor of the OP. AD, "Glavbolgarstroy International" AD and "Gas Project Development" Ltd., at a price of BGN 221,221,200 excluding VAT.
It is important to note that both participants in the procedure do not have expertise in organizing and executing drilling for oil and natural gas, especially under the existing conditions in the "Chiren" gas field. Given this, they declare as subcontractors experienced foreign drilling companies with national and international experience.
When conducting the tender for the OP and after its award, however, "Exalo Drilling Chiren" has repeatedly changed the drilling subcontractor to companies with questionable professional experience in drilling inclined-directed wells in conditions of formation pressure deficiency, as is the case with the "Chiren" gas well.
On 06/04/2023 between "Bulgartransgaz" EAD (contractor) and DZZD "UGS Drilling Chiren" (Contractor) has signed Contract No. 6004 for the implementation of the OP "Structural planning, development of an investment project, supply of the necessary materials and equipment, construction and commissioning of all stages to a site: Expansion of the capacity of the Chiren PGH"; drilling fund"
Regardless of the requirements of the technical conditions under the OP, the Contractor is taking targeted actions to change the conditions for the implementation of the OP and, more specifically, to replace the planned 10 inclined-directed wells with 10 vertical wells, despite the proven ineffectiveness of the proposed approach.
For the Contractor, the economic effect of the proposed change in the type of wells is lower costs for their drilling in the amount of BGN 80-90 million (the value of an inclined-directional well is about 40% higher than that of a vertical drilling).
For the Contracting Authority, there is no positive economic effect, but severe technical and economic consequences, including compromising of PGH "Chiren". The prepared report on the proposed replacement is the subject of an internal audit at "Bulgartransgaz", commissioned by the company's executive director. The conclusions of the same are scandalous and should be the subject of a prosecutor's investigation due to the complete inaction (or tacit cooperation) of the management of "Bulgartransgaz". EAD to the actions of the Contractor. Instead of taking appropriate actions to protect the interests of the Employer, the management of the company is trying to discredit its experts working on the project, including and the internal auditor.
Despite the above findings, the Contractor additionally proposes to change the construction of the wells from "heavy" (deeper siege and full exploitation columns) of "light" (shallower casings and more interval production columns, and in the productive interval it is segmental and with a reduced diameter). Extremely risky for gas drilling in complex geotechnical conditions.
For the Contractor, the economic effect of the proposed change in the design of the boreholes is lower costs for drilling and equipment of the boreholes in the amount of BGN 10-15 million (lower costs for drilling holes with small diameters and shorter casing strings ). For the Contracting Authority, there is no positive economic effect, but severe technical and economic consequences, including compromising of "Chiren" PGH.
In summary, the technical-economic effect of the proposed fundamental changes in the conceptual project for the expansion of the "Chiren" gas station. enable the Contractor:
- to overcome the lack of experience and expertise for drilling inclined-directional wells
- to illegally receive about BGN 100 million
All costs, risks and serious technical and economic problems related to the future operation of the "Chiren" gas turbine remains for the Employer. and certainly his compromising.
In view of the above, BEMF experts reasonably assume the existence of a corrupt practice in the public procurement in question, the implementation of which with the selected organization also creates serious risks for the energy security of the country. Analyzing the state of the problem, the BEMF expert team, which performed the analysis of the actions and circumstances of the organization and execution of the public procurement, proposes:
- the implementation of the public procurement should be terminated immediately, taking into account the remarks and recommendations from the internal auditor's report;
- the public procurement should be re-announced under the announced technical conditions and implemented after a revision of the tightness of the existing wells, their rehabilitation or liquidation.;
- about the actions of the management of "Bulgartransgaz" EAD, to the detriment of the company and the energy security of the state, was referred to the Prosecutor's Office of the Republic of Bulgaria, as well as the European Prosecutor's Office due to the co-financing of the project with European funds.
