Lembergs: purchase of Ventspils terminal a political decision

  • 2004-12-01
  • From wire reports
RIGA - Russia's investors are interested in purchasing capital shares of Ventspils Naftas Terminals, the oil and oil products handling subsidiary of Ventspils Nafta, but a deal will be possible only if it receives political support in Russia, Ventspils Mayor Aivars Lembergs said last week.

In an interview to Neatkariga Rita Avize, a daily paper controlled by Ventspils business interests, Lembergs said, "As far as I know, there is mutual interest in the Ventspils oil terminal. It has been discussed to sell about 50 percent or even 100 percent of this company. It would also be possible to sell 66 percent in LatRosTrans, which presently is owned by Ventspils Nafta."

Lembergs stressed that although there has been considerable investor interest in the oil terminal for some time, no deal is possible without first getting political support from the Kremlin.

"Where there is oil there is always politics," he said. "Often there are even military conflicts. Therefore, it is understandable that Russia's private investor, when deciding to invest in an oil-related business abroad, will do it only when he gets a positive signal from the powers-that-be."

The Ventspils mayor, who has been blamed for allowing the situation with oil transit to disintegrate, went on to say, "Practice proves that any talks end to no avail, as long as there is no such signal. Therefore, if there is someone talking of a near deal, he has been on Mars - or at least on the moon."

Several private oil producers in Russia have reportedly expressed interest in acquiring the Ventspils oil terminal, which has a capacity of almost 30 million tons of crude and, in contrast to Russia's Primorsk terminal, does not freeze. Currently, however, Latvia is receiving no oil via the pipeline and has been forced to handle oil cargoes by rail.

Ventspils Nafta last year set up a subsidiary, Ventspils Naftas Terminals, in order to facilitate a sale of its oil-handling business sector. The Ventspils Nafta holding also comprises oil and oil-product pipeline operator LatRosTrans, in which a 34 percent stake is held by Russia's oil-product pipeline operator Transnefteprodukt, the LASCO shipping company and Preses Nams printing company.

Ventspils Nafta's largest shareholders are the state, which holds 38.6 percent, and Latvijas Naftas Tranzits, a private, non-transparent entity that holds 42.8 percent and the right to repurchase another 9.2 percent.