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Ventspils Nafta ready to cooperate with Russia

May 02, 2007
By TBT staff

RIGA - A top executive of Ventspils Nafta, Latvia's multi-business group with a strong presence in the oil transit market, said the company was prepared to take on a strategic Russian investor. The statement comes amid continuing bickering among Ventspils Nafta's owners and the rising influence of major shareholder Vitol, a Rotterdam-based oil trader.

In the words of Ventspils Nafta board chairwoman Olga Petersone, "We are ready to see a strong Russian partner in our oil business in Ventspils Nafta. We have informed the largest Russian oil companies about that."
As she told the Dienas Bizness daily, "If such cooperation would help renew oil flows in the pipeline, we are interested in it."
Petersone, a close ally of Ventspils Mayor Aivars Lembergs, who is currently under arrest and awaiting trial for bribery and fraud, said the company was prepared to share ownership with the potential Russian investor.
"Of course they have to hold shares to be equally important," she said, adding, "but we do not speak about selling Ventspils Nafta holding."

Ventspils Nafta has interests in oil transit, shipping and media. In April Vitol, a strategic investor, announced that it has a 47.89 percent stake via its subsidiary, Euromin Holdings. The second largest shareholder, LNT, owns 38 percent. It was recently reported that LNT sold 4.2 million shares in Ventspils Nafta, cutting its stake to 38 percent.
In the past Russian oil companies have been reluctant to invest in Ventspils Nafta since they were interested in total control over the company and uneasy with the seemingly Byzantine infighting among Ventspils business circles.
Renewing the flow of Russian crude to Ventspils, ceased in 2003, will be crucial for the long-term success of the terminal. Vitol, which has vast experience on the Russian market, is confident it can find a partner to work with in Russia.
It remains to be seen whether the visions of Vitol, LNT and Ventspils Nafta executives coincide, and if they do, whether they could bring on board a Russian supplier.

Shareholders of Ventbunkers, majority owner of LNT, many of whom are hostile to Ventspils Mayor Lembergs, whose influence in the oil transit industry is said to be overwhelming, are trying to resume control over LNT, and hence, Ventspils Nafta.
Ventbunkers shareholders are embittered about being shut out of LNT by court order last year and are trying to wage a comeback.

Board Chairman Rudolf Meroni told the Dienas Bizness daily last week that the previous managers of LNT caused an estimated $100 million in losses by selling the 11 percent stake in Ventspils Nafta.

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