Ventspils still fishing for investors

  • 2005-01-12
  • From wire reports
VENTSPILS - Ventspils Nafta officials made yet another round of statements about the need to find a strategic Russian investor for the faltering oil terminal, which last week reported a 21 percent drop in oil and oil-product handling in 2004.

Mamerts Vaivads, chairman of the company's council, told a press conference on Jan. 6 that there was little hope for Ventspils Naftas Terminals, the holding company established around Ventspils oil interests, without a Russian investor that would insure oil supplies via pipeline.

He said that the management's main goal was to find a strategic investor who would "fill the oil pipeline," but so far no proposals from Russian companies have been forthcoming. Considering the presence of Russian investors in Estonia's and Lithuania's downstream oil industries, this does not bode well, he added.

"Only we have remained without the presence of Russians, and it has to be understood that our prospects do not look too bright in this situation," said Vaivads.

He added that Russian Ambassador to Latvia Viktor Kalyuzhny had promised to help find a strategic investor, since he believed that blocking the oil pipeline to Latvia was harmful to both Latvia and Russia. "Kalyuzhny has worked in the oil business, and I hope very much that, with his help, we will be able to solve this matter in the near future," said Vaivads.

Since Russia decided to cease all pipeline deliveries of crude oil in the beginning of 2003, Ventspils officials have struggled to come up with a formula for attracting a Russian investor. The creation of the shell company, Ventspils Naftas Terminals, was one such solution, but it has failed to produce any results. Russian government officials, in the meantime, claim that their priority is to fill their own ports' capacity, though they do not rule out eventually renewing deliveries to Latvia.

Olegs Stepanovs, a major shareholder in Ventspils Nafta, recently said that the company was actively searching for an investor, though he declined to mention any names.

A group of Ventspils-based businessmen and politicians control nearly 52 percent of the oil terminal, 42.8 percent through a variety of offshore companies and 9.2 percent via a repo-transaction. The state owns a 38.6 percent stake.

Transport Minister Ainars Slesers said last week that only Russian companies were likely to be interested in acquiring the state's holding, and that, so far, no proposals have materialized. Economy Minister Krisjanis Karins has raised the issue about whether the state is managing its stake effectively, and on Jan. 6 he went to Ventspils to find out more about the company.

Last week Ventspils Naftas Terminals told the Riga Stock Exchange that it handled 8.4 million tons of oil and oil products in 2004, down 21.5 percent year-on-year. Of this, 3.8 million tons was diesel fuel, 2 million tons oil and 2.6 million tons gasoline. Almost all cargo was supplied by railway.

"This situation was influenced by circumstances that are not dependent on the terminal's operations. First - the rapid growth in oil handling capacities at Russia's ports, the drop in volume of diesel fuel transported from Russia by railway, and the unequal railway tariff policy pursued by Russia in relation to Latvia," the company said.

The Ventspils Nafta concern comprises the VNT oil terminal, LatRosTrans pipeline operator, Preses Nams printing company, Mediju Nams publishers and Nekustamie Ipasumi VN Uznemumi real estate development and management company. The concern also has substantial holdings in Latvia's leading maritime shipping company Latvijas Kugnieciba (LASCO).