Yukos deal divides political opponents

  • 2001-06-28
  • Virgilijus Savickas
VILNIUS - Lithuania's acting government approved an agreement on the afternoon of June 25 between the U.S. oil company Williams International and Russia's Yukos for long-term oil supplies to the Lithuanian oil refinery Mazeikiu Nafta.

However, the government refused to issue a state guarantee to back $50 million litas of the loan from the Yukos company. This clause will be amended by both sides in the final text of the agreement by mid-September.

An agreement of cooperation was signed between Williams and Yukos on June 14, in which both are to become equal financial partners with a 26.85 percent share in the refinery. For it not to become void it had to be approved by the government by the end of June, but in the midst of the government crisis this was an uneasy task.

"A request by Algirdas Brazauskas not to proceed with the approval was made in a telephone conversation to me an hour and a half before the decision was due to be taken," said Eugenijus Gentvilas, acting prime minister, at a press conference.

Algirdas Brazauskas, a former president and leader of the Social Democrats, is considered to be the one and only candidate to the post of prime minister. Gentvilas quickly notified President Valdas Adamkus of the conversation.

The reaction was immediate. The president's adviser Darius Kuolys reported that Adamkus "insistently" asked Gentvilas to make sure the agreement with Yukos, "crucially important for the state," would be approved on June 25.

Kuolys added that Adamkus considered the Social Democrat leader's "pressure not to sign the agreement" was "against the state."

U.S. President George W. Bush and Secretary of State Colin Powell sent letters to the Lithuanian president welcoming the agreement and praised Lithuania for its achievements in trans-Atlantic integration.

"We value your strong leadership in increasing Lithuania's defense capabilities, solidifying our excellent commercial ties, and maintaining good neighborly relations," Bush said in his letter.

"There is great mutual benefit to our support of Williams' $400 million energy-sector investment, especially given the new long-term oil supply agreement with a Russian supplier," Powell said in his letter.

Arturas Paulauskas, parliamentary chairman and now clearly a close ally of Brazauskas, accused the Liberals and resigned prime minister Rolandas Paksas of being a slave to the interests of Russian oil companies.

This accusation was based on the report of an adviser to the prime minister who Paulauskas declined to name. Negative conclusions on the agreement with Yukos were allegedly raised in the report.

No decision has been made yet on the privatization of the state-run giant Lietuvos Dujos. Gentvilas invited Brazauskas, Paulauskas and other party leaders for consultations on June 27.

"There should be a consensus of all political parties in this issue," Gentvilas told Lithuanian TV.