VILNIUS - Baltic governments fretted last week over reports that Russia's Justice Ministry had ordered a cessation of oil production at Yukos' main production subsidiary, Yuganskneftegaz, sparking fears of a supply crunch at Baltic pumps.
Yukos Board Chairman Steven Theede said the company could stop oil exports by railway as soon as this week if the Russian government did not grant the company access to its frozen bank accounts. But by the start of the week the ministry gave the oil producer one-month to come up with the funds.
But the Mazeikiu Nafta refinery said last week that operations were proceeding according to schedule and that no supply disruptions had occurred.
"We have not received any information about any changes in crude supply schedule. The crude flows as planned," said Giedrius Karsokas, head of the communications department of the Mazeikiu Nafta concern.
The refinery's crude supply schedule has been approved until late September, he said, adding that payments for shipments had also been finalized. Still, supply fears are likely to remain while the Russian authorities hone in on Yukos' production assets in an effort to recoup billions of dollars in unpaid taxes.
Rimantas Rudzkis, chief analyst with Nord/LB Lietuva Bank, said that if Yukos halted supplies to the Lithuanian refinery, production could suffer for several months.
"[Mazeikiu Nafta] may find it difficult to clinch new deals on purchase of crude," he said.
The Mazeikiu Nafta concern, which includes the refinery, an oil export terminal and a sales network, contributes about 2 percent to Lithuania's gross domestic product, the analyst said. It followed that any problems with the refinery are likely to affect the economy.
What's more, crude oil supply disruptions may result in problems for the government, as Mazeikiu Nafta would be unable to repay the 820 million litas (237.7 million loan) loan granted by the state and approximately 500 million litas in loans granted by commercial banks and backed by state guarantees.
Meanwhile, Latvian experts expressed their own concerns about the Yukos standoff, saying a possible suspension of oil exports may create big problems in the country's fuel market. Mazeikiu Nafta Trading House, a Latvian subsidiary of Mazeikiu Nafta and controlled by Yukos, supplies fuel to most traders in the country. Since starting business in January, the trading house sold 141,000 tons of oil products, while annual sales are planned around 300,000 tons.
"For now we won't speak about fuel prices. The biggest problem is whether we will have enough fuel supplies," Latvian Fuel Trader Association Chairman Ojars Karcevskis told the Baltic News Service.
He said if Yukos ceased supplies to Lithuania, Latvian fuel traders would have to go to Scandinavian refineries, and this would mean adding at least 0.01 lat to the retail price.
Latvija Statoil, one of the country's largest fuel traders, said it believed concerns about a fuel deficit due to Yukos were ungrounded.
"Considering world market development trends in recent days, it is possible that the retail price may grow a little under influence of world prices, but the price growth should not be as steep as in May," the company said in its statement.
"Statoil won't be raising prices only because of the unstable situation at Yukos," it said.