Mazeikiu refinery to stay in Yukos' control

  • 2004-02-05
  • By Steven Paulikas
VILNIUS - Officials attempted to stamp out the uncertainty cast over the future of the Mazeikiu Nafta oil refinery, one of Lithuania's most strategic enterprises, amid rumors in late January that the government was considering repurchasing a controlling stake over fears that the majority owner Yukos, the besieged Russian company, would opt to abandon the refinery.

Following the issuing of an arrest warrant in Russia for Yukos executive and major shareholder Mikhail Brudno, Parliamentary Chairman Arturas Paulauskas told reporters he had approached the government about the possibility of buying the 53.7 percent stake in Mazeikiu Nafta owned by the Russian oil company.
Paulauskas voiced concern that the shares could be seized by the Russian government as part of its investigation on Brudno, thus effectively transferring one of Lithuania's most sensitive objects directly to Moscow.
Amid the confusion caused by this comment, a statement made by Yukos' representative in Lithuania, Tomas Gizas, that the company "would consider" a government buyout if approached was widely interpreted as a signal that such a deal could be underway.
But this week both government and refinery officials were quick to bring a halt to this speculation.
"This comment was taken totally out of context and misinterpreted," said Giedrius Karsokas, Mazeikiu Nafta's press representative.
"The question was merely if the company would consider an offer if one were received, and quite naturally, the answer is of course 'yes.' But this in no way means that Yukos has received an offer or is looking for bidders," Karsokas explained. "There are absolutely no plans for Yukos to sell the stake."
In a statement issued by Yukos on Jan. 28, the company said it was not considering selling its stake in the Lithuanian oil refinery.
Prime Minister Algirdas Brazauskas was also unequivocal in his refutation of the rumors, telling the Seimas (Lithuania's parliament) on Jan. 29 that such speculation was "without reason."
Brazauskas defended the recent decrease in throughput at the Butinge terminal as the result of competition from the Primorsk terminal on the Gulf of Finland and praised the company for making the refinery profitable after years of solid losses.
According to government officials responsible for overseeing the refinery, Yukos' profitable operation of Mazeikiu Nafta currently outweighs the vague possibility of interference in ownership from Moscow.
"I'm happy that it's started to make a profit. As long as it's working profitably, it's not important who the owner is," said Vaclovas Karbauskis, chairman of the Seimas economics committee.
Nonetheless, Karbauskis ad-mitted that his committee might examine the issue in depth.
"I have suggested a meeting on the topic of Mazeikiu Nafta's ownership to the members of the committee. When they return from the parliamentary break, they will decide whether or not to hold the meeting," he said.
Regardless of the government's present or future intentions, finances could be the deciding factor in any decision to buy back Mazeikiu Nafta shares. Paulauskas told reporters that aides had estimated the cost of a share purchase at 1 billion litas (290 million euros).
The government currently owns 40.7 percent in Mazeikiu Nafta.
In 2003, Mazeikiu Nafta processed 7.2 million tons of crude and made an estimated profit of 209 million litas, up from a loss of 144 million litas the previous year.
The company is projecting a profit of 54 million litas for 2004.