Yukos wants to retain control of Mazeikiu

  • 2005-02-02
  • By The Baltic Times
VILNIUS 's Top Yukos managers told Prime Minister Algirdas Brazauskas on Tuesday that they did not intend to sell their majority stake in Mazeikiu Nafta and that crude oil supplies would resume later in the day.

The refinery was forced to shut down operations after oil deliveries from Russia were halted on Saturday on what was apparently a bank technicality. Yukos executives, however, assured the prime minister that supplies would resume later in the day.

It was the first halting in refinery operations as a result of Moscow's campaign to dissemble Yukos, which had been the country's largest producer of crude.

Brazauskas met with CEO Steven Theede, Yukos RM president Mikhail Yelfimov and CFO Bruce Misamore. He told reporters after the meeting that the executives did not want to sell Yukos' 53.7 percent stake and that their stance on exercising an option to buy an addition 10 percent stake 's given to them when they took over the refinery from Williams International 's was still unclear.

"Of course, they will seek to retain their stake," he said. "As to the option (to buy another 9.72 percent of shares), they have not made a firm decision as yet. The talks will take place today, but I do not think there will be a decision today.'

The prime minister went on to say that "the situation may change, depending on the Russian government's attitude toward Yukos. The future of Mazeikiu Nafta will also depend on this, and I do not think that it is hopeless, as there are many companies interested in Mazeikiu Nafta."

Mazeikiu Nafta, which includes a refinery, export terminal and a distribution/marketing subsidiary, is Lithuania's largest taxpayer. It has struggled to become profitable in recent years after a shareholder crisis, but last year it finally turned the corner and saw red on its financial statements.

"They do not want to lose this enterprise. They make it a point of honor to ensure supplies to the company. There is a schedule of supplies for the whole first quarter, and the disruption is purely technical. This is not a political decision to cut oil supplies. They will do their best to ensure (supplies)," Brazauskas said.

Yukos executives began talks with Economy Minister Viktor Uspakich in the morning, and together the two sides were to discuss the fate of the 9.72 percent stake on option.

The Lithuanian government, which owns 40.6 percent of Mazeikiu Nafta, would like to take over the option. If it did, it would become the refinery's new majority owner. Two weeks ago, the Economy Ministry sent a letter to Yukos Finance, a Dutch-registered subsidiary of the Russian oil major, offering to buy the stake.

The government also wants to cancel an agreement that gives Yukos management rights at Mazeikiu Nafta until 2015.