Revelations of “Secret” Talks Between Hedge Fund Elliott Management and Bulgartransgaz: Geopolitical Games and Business Interests
The Wall Street Journal news story on “secret” negotiations between the American hedge fund Elliott Management and Bulgartransgaz on potential asset acquisition comes as no surprise to those tracking the actions of the Bulgarian company’s current leadership and leaks about coordinated deals between the business circles of Trump and Putin. Key figures include Donald Trump’s special representative Steve Witkoff, and Vladimir Putin’s confidante Kirill Dmitriev, a central player in Russia’s energy deals.
The confidentiality surrounding the talks between the US hedge fund Elliott Management and Bulgartransgaz is standard practice for Trump’s envoys when negotiating with Russia or its intermediaries. However, this information leak is not accidental and can be interpreted in two ways:
- Trial Balloon – Individuals close to the deal, aware of its public and institutional sensitivity, release information to gauge reactions. If the response is within expected limits, the deal may proceed with some fine tuning.
- Alarm – The source aims to warn the public and preempt the deal by exposing the involved parties.
Which is more likely? Judge for yourself after reading the analysis.
Geopolitical Context and Unfeasible Deals
At various points, negotiations between Trump’s and Putin’s representatives were reported to involve projects like resuming Russian gas transit through Nord Stream or Ukraine’s transit network. These plans, however, are doomed without an end to the war. The chances of this have dwindled due to Putin’s unfeasible demands and Washington’s realization that goodwill does not work with Moscow.
There are also objective obstacles: such deals require green light from the European Commission (EC), Germany (for Nord Stream), or Zelenskyy (for Ukraine’s network). Trump may praise Ursula von der Leyen lately, but the likelihood of Brussels shifting its stance is minimal.
Turk Stream – Russia’s Last Gateway for Gas into the EU
Turk Stream remains the sole operational pipeline through which Russia increases its gas deliveries to Europe, exceeding 20 billion cubic meters annually. Russia aims to surpass 30 billion cubic meters, but achieving this requires coordinated efforts from American and Turkish partners, as well as Bulgarian politicians from the domestic “Turk Stream coalition.” However, Bulgaria cannot overcome the European Commission’s (EC) objections alone, just as it could not finance and build Turk Stream without US support. U.S. Congressional sanctions on the project necessitated workarounds, including direct involvement from Donald Trump.
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At present, the EC will not approve any deal that perpetuates Europe’s dependence on Russian gas, even if supported by an American hedge fund or backed by the White House. Under Trump, American involvement carries no advantage in Europe—quite the contrary. Consequently, the schemes of Bulgartransgaz’s leadership to sustain Russian gas imports under American patronage are untenable unless Bulgaria decide to confront the EU at its own peril. Europe cannot justify supporting Ukraine with billions while simultaneously channeling even greater sums from gas sales to Putin. The window for compromises has closed, and the prospects for reviving the International “Turk Stream coalition” involving Orbán, Fico, Vučić, and Borisov are purely hypothetical, especially after the recent media leaks revealing Orbán’s aggressive military plans toward Ukraine.
In this context, the likelihood of the European Commission granting a new exemption for Russian gas that would benefit the Hungarian leader is virtually zero.
Conflicting Geopolitical Pulls
Pressure from various directions will inevitably lead to tensions between the EU and Bulgaria, where the Bulgarian political class faces conflicting geopolitical pulls far more serious than debates over the euro. The EC plans to bypass Slovakia and Hungary’s vetoes through qualified majority decisions and Russian gas dedicated import tariffs hike, while its negotiations for importing American liquefied natural gas (LNG) pit the interests of U.S. producers against Trump’s entourage, who seek quick profits through Russian gas.
Bulgaria stands at the center of these maneuvers, controlling the critical gateway for Russian pipeline gas into the EU. This position places it at the forefront of implementing the EU’s evolving policies to cut Russian gas imports. Upcoming measures, including additional import tariffs on Russian gas, aim to level the playing field for American and any other LNG, making it a viable alternative. Recent US LNG contracts with India, based on the Henry Hub pricing model, demonstrate that it can compete effectively, even against Russian flows via Turk Stream, challenging Moscow’s hold on the European market.
Schemes Surrounding Bulgartransgaz
It is highly unlikely that Elliott Management’s interest in Bulgartransgaz’s assets arose spontaneously. Bulgarian politicians and businessmen likely invested significant effort to convince the hedge fund to “invest,” seeking to perpetuate the Turkish Stream schemes that provide financial leverage for Hungary’s Viktor Orbán to sustain his policies undermining EU cohesion. Bulgartransgaz, under CEO Vladimir Malinov, has a vested interest in maintaining Russian gas transit, as revenue from its Gazexport transmission contract is critical for repaying debts, including the €220 million owed to Arkad Consortium.
The process of transferring this debt to new owners is well underway. Among the interested parties are companies linked to senior Russian politicians representing President Vladimir Putin, who are tied to Turk Stream. In strategically sensitive deals, the Kremlin typically operates through Western intermediaries—such as investment banks or funds—to mask its involvement. A prominent Bulgarian businessman, known for numerous questionable transactions involving VTB (Putin’s bank), plays a pivotal role in brokering the interests of Russian parties and attracting Western partners.
Should a VTB-affiliated foreign company, investment bank, or fund acquire Bulgartransgaz’s debt, it would gain control over the transmission system operator (TSO) through both revenue streams and liabilities. This places Bulgartransgaz in an impossible dilemma: either violate EU policies cutting Russian gas by the end of 2027 and continue its transit or face bankruptcy if the debt is called in prematurely—a likely scenario if revenues collapse.
Former Prime Minister Boyko Borisov is a central figure in these efforts, overseeing Malinov’s actions and aligning Bulgarian stakeholders’ acts on a potential deal involving a U.S. investor, Russian gas, and Bulgartransgaz’s transmission network. Beyond its business and political implications, Borisov has a personal stake, as Turk Stream is his flagship project. A disruption in Russian gas flows would tarnish his reputation, especially given persistent claims that the project enabled Putin’s war in Ukraine. Much like the Botas deal overshadows President Rumen Radev, Turk Stream looms over Borisov.
This explains the secrecy surrounding the negotiations with the U.S. investor and the debt transfer. Bulgaria’s opposition to the European Commission’s roadmap for phasing out Russian gas according the Borisov and Malinov should reflect a “national interest”—protecting Bulgartransgaz’s revenues and its Gazexport contract to avert bankruptcy.
Who led BTG into this trap?
History Repeats Itself?
Bulgartransgaz’s CEO is currently under investigation by the European Public Prosecutor’s Office, adding a layer of complexity to these plans. His involvement in deals linked to Russian energy, often framed as “diversification” or transactional business, raises serious concerns. This time, overcoming the European Commission’s resistance will be particularly difficult, even with the backing of Russian partners and American lobbying circles tied to Donald Trump.
It is highly unlikely that Malinov could independently negotiate the sale of portions of Turk Stream or other transmission assets to an American investor through direct, back-channel deals, bypassing the stringent tender procedures and investment screening regulations mandated for strategic enterprises like Bulgartransgaz. Even if figures like Boyko Borisov and Delyan Peevski support Malinov’s efforts, hoping the political noise around Bulgaria’s eurozone accession might provide cover, the EU’s regulatory framework leaves little room for such maneuvers.
This situation echoes the intense pressure Bulgaria faced in the mid-1990s, when Gazprom sought control over its gas transmission system. Back then, Sofia resisted, choosing to protect its energy sovereignty—a stance that remains equally relevant today. There is no compelling reason for Bulgaria to yield now, particularly to an ostensibly American investor acting in the Kremlin’s strategic interest.
Bulgartransgaz’s status as a critical strategic asset means that any transaction involving its infrastructure must comply with strict EU regulations, including public tenders and rigorous investment screenings. Attempts to bypass these safeguards, even with high-level political support, risk institutional backlash and public scrutiny, especially as Bulgaria approaches eurozone accession.
To protect its long-term national interests, Bulgaria should reject covert, Kremlin-aligned schemes and instead focus on alternative energy projects, such as the Vertical Gas Corridor, expanded LNG imports, and enhanced non-Russian pipeline networks. These steps would not only align Bulgaria with European energy independence goals but also shield its sovereignty from being compromised by foreign actors, whether Russian or ostensibly American.
Alternative Path
An alternative strategy exists to keep Bulgartransgaz solvent while phasing out Russian gas and secure Bulgaria’s role as a gatekeeper to EU’s gas market, but it demands new political leadership and a change in the transmission system operator’s (TSO) management. By 2027, Bulgaria could prioritize projects to secure alternative gas supplies:
- Vertical Gas Corridor to Ukraine: This could replace most Russian gas flows and associated revenues.
- Transmission of American and Other LNG: Utilizing terminals in Greece and Turkey to diversify supply sources.
- Expanding Chiren Gas Storage Capacity: Increasing storage to accommodate greater LNG inflows and manage seasonal demand fluctuations.
- Securing European Commission Support: Seeking EC assistance, including legal and financial, to offset losses from halting Russian gas—a more realistic and logical approach than opposing measures to curb Russian gas imports.
These steps are highly unlikely under the current players—Boyko Borisov, Delyan Peevski, VTB-linked businessmen, and Vladimir Malinov—who are deeply invested in sustaining business with Moscow and preserving Viktor Orbán’s Russian energy lifeline.
The covert negotiations between Elliott Management and Bulgartransgaz are part of a broader geopolitical and business scheme to maintain Russian energy influence in Europe. Whether the Wall Street Journal leak represents a trial balloon or a warning hinges on who stands to lose more—the deal’s proponents or those aiming to derail it.
Ilian Vassilev
