RIGA - A subsidiary of the Vitol Group, an international oil and gas trader, announced last week that it has increased its stake in Ventspils Nafta, Latvia's multi-business conglomerate, to 47.89 percent. The increase in ownership comes amid an ongoing crackdown on Ventspils businessmen and politicians and growing rumors of a possible purchase of a majority stake in Ventspils Nafta by Russian interests.
Vitol, which originally purchased a 34.7 percent stake in the company last October, is apparently rushing to gain a majority stake before its ambitious plans for Latvia's oil transit industry can be dashed by a deal between other Ventspils Nafta owners and another foreign investor, possibly a Russian company.
"Vitol has a strong determination to develop Ventspils Nafta. We are one of the world's largest oil and gas companies with strong representation in Russia and the Baltic region, and our primary goal is to develop the business operations of the current Ventspils Nafta assets, ensuring the growth of shareholder value," company board member Dennis Crema said in a statement last week.
"Vitol is here to stay in Ventspils, and I am sure that we will be able to ensure successful business growth and cooperation with partners, including Russian oil companies," he added.
Earlier this month Vitol executives met with Prime Minister Aigars Kalvitis to express their concerns about the "investment environment" in Latvia, which has ostensibly been cast in a doubtful light after a series of high-profile detainments of Ventspils businessmen and the arrest of the town's mayor, Aivars Lembergs.
In the meantime, Vitol is consolidating its position. Two weeks ago its subsidiary, Euromin Holding, announced that it had boosted its stake in Ventspils to 43 percent, pointing to the company's aggressive share-buying campaign on the open market.
Latvijas Naftas Tranzits, a locally registered firm, controls 49 percent of Ventspils Nafta. LNT, in turn, is owned by a diverse group of interests, many of whom are quarreling with one another. LNT's largest shareholder is Ventbunkers, which has a 52 percent stake.
Beyond Ventbunkers the ownership trail grows murky and hard to trace, as it is majority owned by Yelverton Investments, which is registered in the Netherlands.
The presence of Vitol, which is based in Rotterdam, and is one of the largest oil traders in the world, has helped resuscitate Latvia's faltering oil transit business.
In the first quarter of 2007 Ventspils Naftas Tranzits, a subsidiary of Ventspils Nafta, handled 3.3 million tons of crude, up more than 100 percent from the same period last year.
Vitol Group representatives have stated that their long-term goal is to transform Ventspils into the Rotterdam of Eastern Europe. Given their extensive resources and experience, few doubt that the group can accomplish the task 's despite the de facto oil embargo on Russia's part.
Speaking of Russia, Crema said, "We have been cooperating for many years with oil and oil products companies in Russia, and we are sure that this business will also develop in the future."
In 2006 Ventspils Nafta posted 69.3 million lats (98.6 million euros) in consolidated sales and 6.8 million in earnings.
